Fiserv (NASDAQ: FISV) and First Data Corporation (NYSE:FDC) are both large-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.

Earnings & Valuation

This table compares Fiserv and First Data Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Fiserv $5.51 billion 4.85 $930.00 million $4.21 30.40
First Data Corporation $11.58 billion 1.36 $420.00 million $0.76 22.46

Fiserv has higher revenue, but lower earnings than First Data Corporation. First Data Corporation is trading at a lower price-to-earnings ratio than Fiserv, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Fiserv has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, First Data Corporation has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Fiserv and First Data Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fiserv 0 8 5 0 2.38
First Data Corporation 0 8 23 0 2.74

Fiserv currently has a consensus target price of $128.10, indicating a potential upside of 0.08%. First Data Corporation has a consensus target price of $19.57, indicating a potential upside of 14.65%. Given First Data Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe First Data Corporation is more favorable than Fiserv.

Institutional & Insider Ownership

88.4% of Fiserv shares are owned by institutional investors. Comparatively, 40.4% of First Data Corporation shares are owned by institutional investors. 1.8% of Fiserv shares are owned by company insiders. Comparatively, 6.3% of First Data Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Fiserv and First Data Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fiserv 16.31% 43.56% 10.75%
First Data Corporation 5.99% 26.60% 3.12%

Summary

Fiserv beats First Data Corporation on 8 of the 14 factors compared between the two stocks.

About Fiserv

Fiserv, Inc. is a provider of financial services technology. The Company provides account processing systems; electronic payments processing products and services, such as electronic bill payments, transaction processing, account-to-account transfers, and person-to-person payments; Internet and mobile banking systems, and related services, including document and payment card production and distribution, and lending and risk management products and services. The Company operates through two segments: Payments and Industry Products and the Financial Institution Services. The Payments segment services include electronic bill payment and presentment services, Internet and mobile banking software and services, and other electronic payments software and services. The Financial segment provides account processing services, item processing and source capture services, loan origination and servicing products, cash management and consulting services, and other products and services.

About First Data Corporation

First Data Corporation is a provider of commerce-enabling technology and solutions for merchants, financial institutions and card issuers. The Company’s segments are Global Business Solutions (GBS), Global Financial Solutions (GFS), Network & Security Solutions (NSS), and Corporate. The GBS segment provides businesses of all sizes and types with a range of solutions at the point of sale, including merchant acquiring, e-commerce, mobile commerce, point-of-sale, and other business solutions. The GFS segment provides financial institutions, which include bank and non-bank issuers, such as retailers with card portfolios, with a range of solutions that enable them to offer financial products and solutions to their customers. The NSS segment provides a range of network solutions and security, risk and fraud management solutions to business and financial institution clients in its GBS and GFS segments, and to financial institutions, businesses, governments, processors and other clients.

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