Analyzing CompoSecure (NASDAQ:CMPO) and Mastercard (NYSE:MA)

CompoSecure (NASDAQ:CMPO) and Mastercard (NYSE:MA) are both business services companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, valuation, earnings, risk and dividends.

Risk and Volatility

CompoSecure has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Mastercard has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for CompoSecure and Mastercard, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CompoSecure	1	0	5	0	2.67
Mastercard	0	5	24	2	2.90

CompoSecure currently has a consensus price target of $17.67, indicating a potential downside of 10.55%. Mastercard has a consensus price target of $617.93, indicating a potential upside of 4.60%. Given Mastercard’s stronger consensus rating and higher possible upside, analysts clearly believe Mastercard is more favorable than CompoSecure.

Valuation and Earnings

This table compares CompoSecure and Mastercard”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CompoSecure	$420.57 million	4.81	-$53.72 million	($1.68)	-11.76
Mastercard	$30.24 billion	17.66	$12.87 billion	$14.83	39.84

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

Institutional and Insider Ownership

37.6% of CompoSecure shares are owned by institutional investors. Comparatively, 97.3% of Mastercard shares are owned by institutional investors. 52.1% of CompoSecure shares are owned by insiders. Comparatively, 0.1% of Mastercard shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares CompoSecure and Mastercard’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CompoSecure	-24.53%	-65.50%	26.83%
Mastercard	44.93%	200.01%	29.26%

Summary

Mastercard beats CompoSecure on 14 of the 15 factors compared between the two stocks.

About CompoSecure

CompoSecure, Inc. manufactures and designs metal, composite, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which supports specific digital assets, including Bitcoin, Ethereum, non-fungible tokens and others. In addition, it offers Payments + Arculus Secure Authenticate, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.

About Mastercard

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The company offers integrated products and value-added services for account holders, merchants, financial institutions, digital partners, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid programs services; and commercial credit, debit, and prepaid payment products and solutions. It also provides solutions that enable businesses or governments to make payments to businesses, including Virtual Card Number, which is generated dynamically from a physical card and leverages the credit limit of the funding account; a platform to optimize supplier payment enablement campaigns for financial institutions; and treasury intelligence platform that offers corporations with recommendations to enhance working capital performance and accelerate spend on cards. In addition, the company offers Mastercard Send, which partners with digital messaging and payment platforms to enable consumers to send money directly within applications to other consumers; and Mastercard Cross-Border Services enables a range of payment flows through a distribution network with a single point of access to send and receive money globally through various channels, including bank accounts, mobile wallets, cards, and cash payouts. Further, it provides cyber and intelligence solutions; insights and analytics, consulting, marketing, loyalty, processing, and payment gateway solutions for e-commerce merchants; and open banking and digital identity services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus name. Mastercard Incorporated was founded in 1966 and is headquartered in Purchase, New York.