Voya Financial (NYSE:VOYA) versus Global Payments (NYSE:GPN) Critical Comparison

Global Payments (NYSE:GPN) and Voya Financial (NYSE:VOYA) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Global Payments and Voya Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Payments	3	17	13	0	2.30
Voya Financial	1	4	7	1	2.62

Global Payments currently has a consensus price target of $95.55, suggesting a potential downside of 2.51%. Voya Financial has a consensus price target of $103.69, suggesting a potential upside of 0.56%. Given Voya Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Voya Financial is more favorable than Global Payments.

Institutional and Insider Ownership

89.8% of Global Payments shares are held by institutional investors. Comparatively, 96.1% of Voya Financial shares are held by institutional investors. 0.6% of Global Payments shares are held by insiders. Comparatively, 1.6% of Voya Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Global Payments and Voya Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Payments	-9.16%	13.80%	5.73%
Voya Financial	7.75%	12.22%	0.45%

Volatility and Risk

Global Payments has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Voya Financial has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Dividends

Global Payments pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Voya Financial pays an annual dividend of $1.88 per share and has a dividend yield of 1.8%. Global Payments pays out -33.6% of its earnings in the form of a dividend. Voya Financial pays out 31.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Voya Financial has raised its dividend for 6 consecutive years. Voya Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Global Payments and Voya Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Payments	$7.71 billion	3.37	$1.40 billion	($2.98)	-32.89
Voya Financial	$8.19 billion	1.14	$654.00 million	$5.93	17.39

Global Payments has higher earnings, but lower revenue than Voya Financial. Global Payments is trading at a lower price-to-earnings ratio than Voya Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Voya Financial beats Global Payments on 12 of the 18 factors compared between the two stocks.

About Global Payments

Global Payments Inc. provides payment technology and software solutions for card, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific. It operates through two segments, Merchant Solutions and Issuer Solutions. The Merchant Solutions segment offers authorization, settlement and funding, customer support, chargeback resolution, terminal rental, sales and deployment, payment security, and consolidated billing and reporting services. This segment also provides an array of enterprise software solutions that streamline business operations of its customers in various vertical markets; and value-added solutions and services, such as point-of-sale software, analytics and customer engagement, payroll and reporting, and human capital management. The Issuer Solutions segment offers solutions that enable financial institutions and retailers to manage their card portfolios through a platform; and commercial payments, account payables, and electronic payment alternatives solutions for businesses and governments. It markets its products and services through direct sales force, trade associations, agent and enterprise software providers, referral arrangements with value-added resellers, and independent sales organizations. The company was founded in 1967 and is headquartered in Atlanta, Georgia.

About Voya Financial

Voya Financial, Inc. engages in the provision of workplace benefits and savings products in the United States and internationally. The company operates through three segments: Wealth Solutions, Health Solutions, and Investment Management. The Wealth Solutions segment offers full-service retirement products; recordkeeping services; stable value and fixed general account investment products; non-qualified plan administration services; and tools, guidance, and services to promote the financial well-being and retirement security of employees. The segment also provides wealth management services, such as individual retirement, managed, and brokerage accounts, as well as financial guidance and advisory services. This segment serves corporate, public and private school systems, higher education institutions, hospitals and healthcare facilities, other non-profit organizations, and state and local governments, as well as institutional and individual customers. The Health Solutions segment offers various insurance products comprising stop loss, group life, group disability, whole life, critical illness, accident, and hospital indemnity insurance. The segment also provides worksite employee benefits, health account solutions, leave management, benefits administration, health plan enrollment, financial wellness, and decision support products and services to mid-size and large corporate employers and professional associations. The Investment Management segment provides fixed income, equity, multi-asset, and alternative products and solutions to individual investors and institutional clients through its direct sales force, consultant channel, banks, broker-dealers, and independent financial advisers. The company was formerly known as ING U.S., Inc. and changed its name to Voya Financial, Inc. in April 2014. Voya Financial, Inc. was founded in 1975 and is based in New York, New York.