Comparing NCR (NCR) & VeriFone (PAY)

NCR (NYSE: NCR) and VeriFone (NYSE:PAY) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Insider and Institutional Ownership

93.0% of NCR shares are held by institutional investors. 1.0% of NCR shares are held by insiders. Comparatively, 1.4% of VeriFone 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.

Risk and Volatility

NCR has a beta of 1.89, suggesting that its stock price is 89% more volatile than the S&P 500. Comparatively, VeriFone has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for NCR and VeriFone, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NCR 0 3 3 0 2.50
VeriFone 1 16 2 0 2.05

NCR presently has a consensus price target of $43.33, suggesting a potential upside of 37.35%. VeriFone has a consensus price target of $21.28, suggesting a potential downside of 6.50%. Given NCR’s stronger consensus rating and higher possible upside, equities research analysts plainly believe NCR is more favorable than VeriFone.

Profitability

This table compares NCR and VeriFone’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NCR 3.56% 80.11% 6.92%
VeriFone -8.09% 14.11% 4.70%

Valuation & Earnings

This table compares NCR and VeriFone’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NCR $6.52 billion 0.57 $232.00 million $3.20 9.86
VeriFone $1.87 billion 1.34 -$173.82 million $0.95 23.96

NCR has higher revenue and earnings than VeriFone. NCR is trading at a lower price-to-earnings ratio than VeriFone, indicating that it is currently the more affordable of the two stocks.

Summary

NCR beats VeriFone on 11 of the 14 factors compared between the two stocks.

NCR Company Profile

NCR Corporation provides omni-channel technology solutions that enable businesses connect, interact, and transact with their customers worldwide. The company's Software segment offers industry-based software platforms and applications and application suites for the financial services, retail, hospitality, and small business industries; and cash management software, video banking software, fraud and loss prevention applications, check and document imaging, remote-deposit capture, and customer-facing mobile and digital banking applications for the financial services industry. It also provides electronic and mobile payment solutions, sector-specific point of sale (POS) software applications, and back-office inventory, and store and restaurant management applications for the retail and hospitality industries; and software support and maintenance, and consulting and implementation services for its software solutions. Its Services segment offers assessment and preparation, staging, installation, implementation, and maintenance and support; and systems management and managed services for its hardware solutions, as well as installation, maintenance, and services for third party networking products and computer hardware. The company's Hardware segment offers multi-function ATMs, interactive teller machines, thin-client ATMs, cash dispensers, cash recycling ATMs, and hardware for check and image processing; financial services hardware; and POS terminals, self-checkout kiosks, order and payment kiosks, bar code scanners, printers, and peripherals to retailers, restaurants, food service companies, and entertainment and sports venues. This segment also provides self-check in/out kiosk solutions for airlines, hotels, and casinos; and wayfinding solutions, digital signage, bill payment kiosks, and gift registries, as well as resells third party networking products. The company was founded in 1884 and is headquartered in Atlanta, Georgia.

VeriFone Company Profile

VeriFone Systems, Inc. offers payments and commerce solutions. The Company is engaged in designing, manufacturing, marketing and supplying a range of payment solutions and complementary services. It provides solutions and services for the retail point-of-sale (POS) that enable various forms of commerce. The Company’s segments include Verifone Systems and Verifone Services. The Verifone Systems segment delivers point of sale electronic payment devices that run the operating systems, security and encryption software, and certified payment software for both payments and commerce. The Verifone Services segment delivers device-related leasing and maintenance, payment transaction routing and reporting, and commerce based services, such as advertising on digital screens. The Company operates in various sectors, such as financial services, retail, petroleum, restaurant, hospitality, transportation and healthcare.

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