Global Payments (NYSE:GPN) and Broadridge Financial Solutions (NYSE:BR) are both large-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.
Valuation & Earnings
This table compares Global Payments and Broadridge Financial Solutions' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Global Payments | $4.91 billion | 12.15 | $430.61 million | $5.86 | 34.49 |
Broadridge Financial Solutions | $4.53 billion | 3.68 | $462.50 million | $5.03 | 28.60 |
Broadridge Financial Solutions has lower revenue, but higher earnings than Global Payments. Broadridge Financial Solutions is trading at a lower price-to-earnings ratio than Global Payments, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and price targets for Global Payments and Broadridge Financial Solutions, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Global Payments | 0 | 4 | 26 | 0 | 2.87 |
Broadridge Financial Solutions | 0 | 3 | 3 | 0 | 2.50 |
Global Payments currently has a consensus target price of $209.5862, suggesting a potential upside of 3.70%. Broadridge Financial Solutions has a consensus target price of $154.1667, suggesting a potential upside of 7.18%. Given Broadridge Financial Solutions' higher possible upside, analysts clearly believe Broadridge Financial Solutions is more favorable than Global Payments.
Dividends
Global Payments pays an annual dividend of $0.78 per share and has a dividend yield of 0.4%. Broadridge Financial Solutions pays an annual dividend of $2.30 per share and has a dividend yield of 1.6%. Global Payments pays out 13.3% of its earnings in the form of a dividend. Broadridge Financial Solutions pays out 45.7% 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. Global Payments has increased its dividend for 1 consecutive years and Broadridge Financial Solutions has increased its dividend for 13 consecutive years. Broadridge Financial Solutions is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Global Payments and Broadridge Financial Solutions' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Global Payments | 6.75% | 6.46% | 4.06% |
Broadridge Financial Solutions | 10.27% | 48.98% | 13.16% |
Institutional and Insider Ownership
86.7% of Global Payments shares are owned by institutional investors. Comparatively, 85.0% of Broadridge Financial Solutions shares are owned by institutional investors. 0.9% of Global Payments shares are owned by company insiders. Comparatively, 2.0% of Broadridge Financial Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
Global Payments has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Broadridge Financial Solutions has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.
Summary
Global Payments beats Broadridge Financial Solutions on 9 of the 17 factors compared between the two stocks.