Fidelity National Information Services (NYSE:FIS) and Visa (NYSE:V) are both large-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, risk and institutional ownership.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Fidelity National Information Services and Visa, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Fidelity National Information Services | 0 | 4 | 24 | 1 | 2.90 |
Visa | 0 | 4 | 26 | 0 | 2.87 |
Fidelity National Information Services currently has a consensus target price of $162.7241, indicating a potential upside of 25.43%. Visa has a consensus target price of $223.4828, indicating a potential upside of 10.86%. Given Fidelity National Information Services' stronger consensus rating and higher possible upside, analysts plainly believe Fidelity National Information Services is more favorable than Visa.
Volatility & Risk
Fidelity National Information Services has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, Visa has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500.
Valuation & Earnings
This table compares Fidelity National Information Services and Visa's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Fidelity National Information Services | $10.33 billion | 7.79 | $298 million | $5.61 | 23.12 |
Visa | $21.85 billion | 17.98 | $10.87 billion | $5.04 | 40.00 |
Visa has higher revenue and earnings than Fidelity National Information Services. Fidelity National Information Services is trading at a lower price-to-earnings ratio than Visa, indicating that it is currently the more affordable of the two stocks.
Dividends
Fidelity National Information Services pays an annual dividend of $1.40 per share and has a dividend yield of 1.1%. Visa pays an annual dividend of $1.28 per share and has a dividend yield of 0.6%. Fidelity National Information Services pays out 25.0% of its earnings in the form of a dividend. Visa pays out 25.4% 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. Visa has increased its dividend for 11 consecutive years. Fidelity National Information Services is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Fidelity National Information Services and Visa'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% |
Visa | 49.74% | 37.22% | 14.61% |
Institutional and Insider Ownership
90.5% of Fidelity National Information Services shares are owned by institutional investors. Comparatively, 80.5% of Visa shares are owned by institutional investors. 0.7% of Fidelity National Information Services shares are owned by insiders. Comparatively, 0.2% of Visa shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Summary
Visa beats Fidelity National Information Services on 10 of the 18 factors compared between the two stocks.