Head to Head Review: Fiserv (NYSE:FI) and Emerald (NYSE:EEX)

Fiserv (NYSE:FI) and Emerald (NYSE:EEX) are both business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, profitability, institutional ownership, dividends, analyst recommendations and valuation.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fiserv	$383.42 million	245.92	$3.07 billion	$5.35	30.12
Emerald	$393.40 million	2.68	-$8.20 million	($0.75)	-6.91

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

Dividends

Fiserv pays an annual dividend of $0.30 per share and has a dividend yield of 0.2%. Emerald pays an annual dividend of $0.30 per share and has a dividend yield of 5.8%. Fiserv pays out 5.6% of its earnings in the form of a dividend. Emerald pays out -40.0% 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. Emerald is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Fiserv and Emerald’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fiserv	17.45%	16.41%	5.40%
Emerald	-1.09%	N/A	-0.40%

Risk & Volatility

Fiserv has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, Emerald has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.

Institutional & Insider Ownership

91.0% of Fiserv shares are owned by institutional investors. Comparatively, 14.9% of Emerald shares are owned by institutional investors. 0.8% of Fiserv shares are owned by insiders. Comparatively, 11.5% of Emerald shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Fiserv and Emerald, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fiserv	0	5	20	2	2.89
Emerald	0	0	1	0	3.00

Fiserv currently has a consensus price target of $172.29, suggesting a potential upside of 6.91%. Emerald has a consensus price target of $8.20, suggesting a potential upside of 58.30%. Given Emerald’s stronger consensus rating and higher probable upside, analysts plainly believe Emerald is more favorable than Fiserv.

Summary

Fiserv beats Emerald on 10 of the 17 factors compared between the two stocks.

About Fiserv

Fiserv, Inc., together with its subsidiaries, provides payments and financial services technology services in the United States, Europe, the Middle East and Africa, Latin America, the Asia-Pacific, and internationally. It operates through Merchant Acceptance, Financial Technology, and Payments and Network segments. The Merchant Acceptance segment provides merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Clover, a cloud based POS and integrated commerce operating system for small and mid-sized businesses and independent software vendors; and Carat, an integrated operating system for large businesses. This segment distributes through various channels, including direct sales teams, strategic partnerships with agent sales forces, independent software vendors, financial institutions, and other strategic partners in the form of joint venture alliances, revenue sharing alliances, and referral agreement. The Financial Technology segment offers customer deposit and loan accounts, as well as manages an institution's general ledger and central information files. This segment also provides digital banking, financial and risk management, professional services and consulting, check processing, and other products and services. The Payments and Network segment offers card transactions, such as debit, credit, and prepaid card processing and services; funds access, debit payments, cardless ATM access, and surcharge-free ATM network; security and fraud protection products; card production; print services; and various network services, as well as non-card digital payment software and services, including bill payment, account-to-account transfers, person-to-person payments, electronic billing, and security and fraud protection products. It serves merchants, banks, credit unions, other financial institutions, and corporate clients. Fiserv, Inc. was incorporated in 1984 and is headquartered in Milwaukee, Wisconsin.

About Emerald

Emerald Holding, Inc. operates business-to-business (B2B) trade shows in the United States. The company provides B2B trade show franchises; and B2B print publications and digital media products, which provide industry specific business news and information across various sectors. It also offers B2B e-commerce and digital merchandising solutions to manufacturers and retailers through Elastic Suite and Bulletin platforms. The company serves retail, design, technology, equipment, and safety and security. Emerald Holding, Inc. was incorporated in 2013 and is headquartered in New York, New York.