Computer Programs and Systems (NASDAQ: CPSI) and USA Technologies (NASDAQ:USAT) are both small-cap it services & consulting – nec companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Institutional and Insider Ownership

99.1% of Computer Programs and Systems shares are held by institutional investors. Comparatively, 36.8% of USA Technologies shares are held by institutional investors. 3.7% of Computer Programs and Systems shares are held by company insiders. Comparatively, 4.4% of USA Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Computer Programs and Systems and USA Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Computer Programs and Systems 1 3 1 0 2.00
USA Technologies 0 0 2 0 3.00

Computer Programs and Systems currently has a consensus price target of $29.40, indicating a potential upside of 1.73%. USA Technologies has a consensus price target of $7.25, indicating a potential upside of 9.85%. Given USA Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe USA Technologies is more favorable than Computer Programs and Systems.

Profitability

This table compares Computer Programs and Systems and USA Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Computer Programs and Systems 2.32% 10.01% 4.63%
USA Technologies -1.78% -0.81% -0.56%

Dividends

Computer Programs and Systems pays an annual dividend of $1.20 per share and has a dividend yield of 4.2%. USA Technologies does not pay a dividend. Computer Programs and Systems pays out 272.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Computer Programs and Systems has a beta of 0.12, indicating that its share price is 88% less volatile than the S&P 500. Comparatively, USA Technologies has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Valuation & Earnings

This table compares Computer Programs and Systems and USA Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Computer Programs and Systems $267.27 million 1.49 $3.89 million $0.44 65.68
USA Technologies $104.09 million 3.17 -$1.85 million ($0.07) -94.29

Computer Programs and Systems has higher revenue and earnings than USA Technologies. USA Technologies is trading at a lower price-to-earnings ratio than Computer Programs and Systems, indicating that it is currently the more affordable of the two stocks.

Summary

Computer Programs and Systems beats USA Technologies on 8 of the 15 factors compared between the two stocks.

Computer Programs and Systems Company Profile

Computer Programs and Systems, Inc. (CPSI) is a provider of healthcare information technology (IT) solutions for rural and community hospitals, and post-acute care facilities. The Company’s segments include acute care EHR, post-acute care EHR, and TruBridge, Rycan, and other outsourcing. Its Acute Care EHR segment consists of acute care software solutions and supports sales generated by its subsidiaries, Evident, LLC (Evident) and Healthland Inc. (Healthland). Its Post-acute Care EHR segment consists of post-acute care software solutions and support sales generated by American HealthTech, Inc. (AHT). Its TruBridge, Rycan, and Other Outsourcing segment primarily consists of business management, consulting and managed IT services sales generated by TruBridge, LLC (TruBridge) and the sale of Rycan Technologies, Inc.’s (Rycan’s) revenue cycle management workflow and automation software.

USA Technologies Company Profile

USA Technologies, Inc. provides technology-enabled solutions and value-added services that facilitate electronic payment transactions within the unattended point of sale (POS) market. The Company is a provider in the small ticket, beverage and food vending industry and is also engaged in offering solutions and services to other unattended market segments, such as amusement, commercial laundry, kiosk and others. It has designed and marketed systems and solutions that facilitate electronic payment options, as well as telemetry and machine-to-machine (M2M) services, which include the ability to remotely monitor, control and report on the results of distributed assets containing its electronic payment solutions. The Company derives its revenues from license and transaction fees resulting from connections to, as well as services provided by, its ePort Connect service.

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