Analyzing Heartland Payment Systems (HPY) and First Data (FDC)

Heartland Payment Systems (NYSE: HPY) and First Data (NYSE:FDC) are both mid-cap transaction & payment services companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, analyst recommendations, institutional ownership and earnings.

Earnings and Valuation

This table compares Heartland Payment Systems and First Data’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Heartland Payment Systems N/A N/A N/A $2.27 45.41
First Data $11.58 billion 1.31 $420.00 million $0.76 21.68

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Heartland Payment Systems and First Data, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heartland Payment Systems 0 0 0 0 N/A
First Data 0 7 22 0 2.76

First Data has a consensus target price of $19.70, suggesting a potential upside of 19.52%. Given First Data’s higher probable upside, analysts plainly believe First Data is more favorable than Heartland Payment Systems.

Insider and Institutional Ownership

49.1% of First Data shares are held by institutional investors. 6.3% of First Data shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Heartland Payment Systems and First Data’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Heartland Payment Systems 3.25% 27.90% 6.09%
First Data 5.99% 26.60% 3.12%

Dividends

Heartland Payment Systems pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. First Data does not pay a dividend. Heartland Payment Systems pays out 17.6% of its earnings in the form of a dividend.

Volatility & Risk

Heartland Payment Systems has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, First Data has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500.

Summary

First Data beats Heartland Payment Systems on 8 of the 12 factors compared between the two stocks.

Heartland Payment Systems Company Profile

Heartland Payment Systems, Inc. is a United States-based company that provides payment processing services to merchants. The Company’s electronic payment processing services facilitate the exchange of information and funds between merchants and cardholders’ financial institutions. Its segments include Payment Processing, which offers card payment processing and related services to its small and medium-sized enterprise merchants and Network Services merchants; Campus Solutions, which offers payment processing, integrated commerce solutions, loan services and open- and closed-loop payment solutions to institutions of higher education; Heartland School Solutions, which offers school nutrition and point of sale solutions and associated payment solutions to K-12 schools; Heartland Payroll Solutions, which provides payroll processing and related tax filing services, and Other, including integrated payments solutions for small ticket merchants, and loyalty and gift card marketing solutions.

First Data Company Profile

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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