Payoneer Global (NASDAQ:PAYO) versus Steel Connect (NASDAQ:STCN) Critical Survey

Payoneer Global (NASDAQ:PAYO) and Steel Connect (NASDAQ:STCN) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Payoneer Global and Steel Connect’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Payoneer Global	11.23%	14.80%	1.42%
Steel Connect	12.23%	39.04%	6.05%

Earnings and Valuation

This table compares Payoneer Global and Steel Connect’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Payoneer Global	$831.10 million	2.21	$93.33 million	$0.24	20.71
Steel Connect	$171.33 million	0.46	$15.61 million	$0.99	12.56

Payoneer Global has higher revenue and earnings than Steel Connect. Steel Connect is trading at a lower price-to-earnings ratio than Payoneer Global, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

82.2% of Payoneer Global shares are held by institutional investors. Comparatively, 47.3% of Steel Connect shares are held by institutional investors. 5.6% of Payoneer Global shares are held by company insiders. Comparatively, 1.8% of Steel Connect shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Payoneer Global has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, Steel Connect has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Payoneer Global and Steel Connect, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Payoneer Global	0	0	7	0	3.00
Steel Connect	0	0	0	0	N/A

Payoneer Global presently has a consensus target price of $6.57, suggesting a potential upside of 32.22%. Given Payoneer Global’s higher possible upside, research analysts plainly believe Payoneer Global is more favorable than Steel Connect.

Summary

Payoneer Global beats Steel Connect on 9 of the 13 factors compared between the two stocks.

About Payoneer Global

Payoneer Global Inc. operates as a financial technology company. It operates a payment infrastructure platform that provides customers with a one-stop, global, multi-currency account to serve their accounts receivable and accounts payable needs. The company delivers a suite of services that includes cross-border payments, physical and virtual MasterCard cards, working capital, risk management, and other services. It also offers various payment options with minimal integration required, full back-office functions, and customer support offered. The company's platform delivers bank-grade security, stability, and redundancy. It serves customers, such as small and medium-sized businesses in approximately 190 countries and territories worldwide. Payoneer Global Inc. was founded in 2005 and is headquartered in New York, New York.

About Steel Connect

Steel Connect, Inc., together with its subsidiaries, provides supply chain services in the United States, Mainland China, Netherlands, and internationally. It offers product configuration and packaging, kitting, and assembly of components and parts into finished goods; and value-added processes, such as product testing, radio frequency identification tagging, product or service activation, language settings, personalization and engraving, multi-channel packaging, and packaging design services. The company provides fulfillment services comprising order management, pick, pack and ship, retail compliance, and demand planning services; and reverse logistics services that simplifies the returns process for retailers and manufacturers, as well as operates a cloud-based e-commerce platform. In addition, it offers warehousing and inventory management services; and software licenses, maintenance, and support services. Further, the company offers its supply chain services to customers in the consumer electronics, communications, computing, medical devices, software, and retail markets. The company was formerly known as ModusLink Global Solutions, Inc. and changed its name to Steel Connect, Inc. in February 2018. Steel Connect, Inc. was incorporated in 1986 and is headquartered in New York, New York.