Reviewing First Data (FDC) & Planet Payment (NASDAQ:PLPM)

Planet Payment (NASDAQ: PLPM) and First Data (NYSE:FDC) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings for Planet Payment and First Data, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Planet Payment 1 3 1 0 2.00
First Data 0 6 19 0 2.76

Planet Payment currently has a consensus target price of $4.50, indicating a potential upside of 0.22%. First Data has a consensus target price of $20.06, indicating a potential upside of 12.32%. Given First Data’s stronger consensus rating and higher possible upside, analysts clearly believe First Data is more favorable than Planet Payment.

Earnings and Valuation

This table compares Planet Payment and First Data’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Planet Payment $54.34 million 4.13 $25.07 million $0.49 9.16
First Data $11.58 billion 1.42 $420.00 million $0.76 23.50

First Data has higher revenue and earnings than Planet Payment. Planet Payment is trading at a lower price-to-earnings ratio than First Data, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

53.0% of Planet Payment shares are held by institutional investors. Comparatively, 49.0% of First Data shares are held by institutional investors. 20.2% of Planet Payment shares are held by insiders. Comparatively, 6.3% of First Data shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Planet Payment and First Data’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Planet Payment 50.75% 24.59% 17.51%
First Data 5.99% 26.60% 3.12%

Summary

First Data beats Planet Payment on 8 of the 13 factors compared between the two stocks.

About Planet Payment

Planet Payment, Inc. is a provider of international payment and transaction processing and multi-currency processing services. The Company operates through two segments: multi-currency processing services and payment processing services. Its multi-currency processing services segment includes Pay In Your Currency, Multi-Currency Pricing and Dynamic Currency Conversion at automated teller machines, enable merchants to offer customized pricing in multiple currencies. Its payment processing services consist of end-to-end authorization, capture, clearing and settlement services to its customers along with localized language support and online access to reconciliation, reporting and analytics services. It provides its services to approximately 118,000 active merchant locations in over 20 countries and territories across the Asia Pacific region, the Americas, the Middle East, Africa and Europe, primarily through its acquiring bank and processor customers.

About First Data

First Data Corporation is a provider of commerce-enabling technology and solutions for merchants, financial institutions and card issuers. The Company’s segments are Global Business Solutions (GBS), Global Financial Solutions (GFS), Network & Security Solutions (NSS), and Corporate. The GBS segment provides businesses of all sizes and types with a range of solutions at the point of sale, including merchant acquiring, e-commerce, mobile commerce, point-of-sale, and other business solutions. The GFS segment provides financial institutions, which include bank and non-bank issuers, such as retailers with card portfolios, with a range of solutions that enable them to offer financial products and solutions to their customers. The NSS segment provides a range of network solutions and security, risk and fraud management solutions to business and financial institution clients in its GBS and GFS segments, and to financial institutions, businesses, governments, processors and other clients.

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