Fidelity National Information Services (NYSE:FIS) and NetEase (NASDAQ:NTES) are both large-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.
Analyst Recommendations
This is a summary of current recommendations for Fidelity National Information Services and NetEase, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Fidelity National Information Services | 0 | 6 | 19 | 1 | 2.81 |
NetEase | 0 | 0 | 10 | 0 | 3.00 |
Fidelity National Information Services currently has a consensus price target of $159.2692, indicating a potential upside of 12.84%. NetEase has a consensus price target of $106.30, indicating a potential downside of 1.81%. Given Fidelity National Information Services' higher possible upside, research analysts clearly believe Fidelity National Information Services is more favorable than NetEase.
Profitability
This table compares Fidelity National Information Services and NetEase's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Fidelity National Information Services | -0.83% | 6.88% | 4.08% |
NetEase | 20.47% | 19.03% | 10.97% |
Risk & Volatility
Fidelity National Information Services has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, NetEase has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500.
Dividends
Fidelity National Information Services pays an annual dividend of $1.40 per share and has a dividend yield of 1.0%. NetEase pays an annual dividend of $0.77 per share and has a dividend yield of 0.7%. Fidelity National Information Services pays out 25.0% of its earnings in the form of a dividend. NetEase pays out 26.3% 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. Fidelity National Information Services has increased its dividend for 1 consecutive years. Fidelity National Information Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
90.5% of Fidelity National Information Services shares are owned by institutional investors. 0.7% of Fidelity National Information Services shares are owned by insiders. Comparatively, 54.7% of NetEase shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Fidelity National Information Services and NetEase's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Fidelity National Information Services | $10.33 billion | 8.48 | $298 million | $5.61 | 25.16 |
NetEase | $8.51 billion | 8.29 | $3.09 billion | $2.93 | 36.95 |
NetEase has lower revenue, but higher earnings than Fidelity National Information Services. Fidelity National Information Services is trading at a lower price-to-earnings ratio than NetEase, indicating that it is currently the more affordable of the two stocks.
Summary
Fidelity National Information Services beats NetEase on 11 of the 18 factors compared between the two stocks.