Critical Contrast: Equifax (EFX) versus China Finance Online Co. Limited (NASDAQ:JRJC)

Equifax (NYSE: EFX) and China Finance Online Co. Limited (NASDAQ:JRJC) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitabiliy, analyst recommendations and dividends.

Earnings and Valuation

This table compares Equifax and China Finance Online Co. Limited’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Equifax	$3.25 billion	5.28	$1.18 billion	$4.44	32.14
China Finance Online Co. Limited	N/A	N/A	N/A	($0.62)	-2.24

Equifax has higher revenue and earnings than China Finance Online Co. Limited. China Finance Online Co. Limited is trading at a lower price-to-earnings ratio than Equifax, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

89.8% of Equifax shares are owned by institutional investors. Comparatively, 7.2% of China Finance Online Co. Limited shares are owned by institutional investors. 1.3% of Equifax shares are owned by insiders. Comparatively, 30.4% of China Finance Online Co. Limited shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Equifax and China Finance Online Co. Limited’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equifax	16.62%	25.20%	10.35%
China Finance Online Co. Limited	-20.77%	-31.23%	-17.17%

Analyst Ratings

This is a summary of current ratings for Equifax and China Finance Online Co. Limited, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equifax	1	3	8	0	2.58
China Finance Online Co. Limited	0	0	0	0	N/A

Equifax presently has a consensus target price of $145.55, indicating a potential upside of 2.01%. Given Equifax’s higher possible upside, equities research analysts clearly believe Equifax is more favorable than China Finance Online Co. Limited.

Dividends

Equifax pays an annual dividend of $1.56 per share and has a dividend yield of 1.1%. China Finance Online Co. Limited does not pay a dividend. Equifax pays out 35.1% of its earnings in the form of a dividend. China Finance Online Co. Limited has increased its dividend for 5 consecutive years.

Risk and Volatility

Equifax has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, China Finance Online Co. Limited has a beta of 2.6, suggesting that its stock price is 160% more volatile than the S&P 500.

Summary

Equifax beats China Finance Online Co. Limited on 9 of the 13 factors compared between the two stocks.

About Equifax

Equifax Inc. is a global provider of information solutions and human resources business process outsourcing services for businesses, governments and consumers. The Company operates in four segments: U.S. Information Solutions (USIS), International, Workforce Solutions and Global Consumer Solutions. Its products and services are based on databases of consumer and business information derived from various sources, including credit, financial assets, telecommunications and utility payments, employment, income, demographic and marketing data. It uses statistical techniques and software tools to analyze all available data, creating customized insights, decision-making solutions and processing services for its clients. It helps consumers understand, manage and protect their personal information and make more informed financial decisions. The Company also provides information, technology and services to support debt collections and recovery management.

About China Finance Online Co. Limited

China Finance Online Co. Limited is a Web-based financial services company in China. The Company provides Chinese retail investors with online access to securities and commodities trading services, wealth management products, securities investment advisory services, as well as financial database and analytics services to institutional customers. The Company operates through three segments: commodities brokerage services, online financial information and advisory service, and other related services in the People’s Republic of China (PRC), and Hong Kong brokerage services. The Company offers financial software, information services and securities investment advisory services to retail investors in China. Through its subsidiary, Shenzhen Genius Information Technology Co., Ltd., the Company provides financial database and analytics to institutional customers, including domestic financial, research, academic and regulatory institutions.