Contrasting First Advantage (NYSE:FA) and Cielo (OTCMKTS:CIOXY)

First Advantage (NYSE:FA) and Cielo (OTCMKTS:CIOXY) are both mid-cap business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Risk and Volatility

First Advantage has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, Cielo has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Profitability

This table compares First Advantage and Cielo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Advantage	0.65%	13.16%	7.33%
Cielo	17.54%	12.28%	1.80%

Institutional & Insider Ownership

94.9% of First Advantage shares are held by institutional investors. Comparatively, 0.0% of Cielo shares are held by institutional investors. 3.9% of First Advantage shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for First Advantage and Cielo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Advantage	0	5	2	1	2.50
Cielo	0	0	0	0	0.00

First Advantage currently has a consensus target price of $20.25, indicating a potential upside of 26.09%. Given First Advantage’s stronger consensus rating and higher probable upside, analysts clearly believe First Advantage is more favorable than Cielo.

Valuation and Earnings

This table compares First Advantage and Cielo”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Advantage	$1.25 billion	2.23	$37.29 million	($0.92)	-17.46
Cielo	$2.12 billion	1.07	$418.05 million	$0.16	5.25

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

Summary

First Advantage beats Cielo on 11 of the 15 factors compared between the two stocks.

About First Advantage

First Advantage Corporation provides employment background screening, identity, and verification solutions worldwide. It offers pre-onboarding products and solutions, such as criminal background checks, drug/health screening, extended workforce screening, FBI channeling, identity checks and biometric fraud mitigation tools, education/work history verification, driver records and compliance, healthcare credentials, executive screening, and other screening products. The company also provides post-onboarding solutions, including criminal records monitoring, healthcare sanctions, motor vehicle records, social media screening, and global sanctions and licenses; and other products comprising fleet/vehicle compliance, hiring tax credits and incentives, resident/tenant screening, and investigative research. Its products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security in global enterprises, mid-sized, and small companies. The company was formerly known as Fastball Intermediate, Inc. and changed its name to First Advantage Corporation in March 2021. First Advantage Corporation was founded in 2002 and is based in Atlanta, Georgia.

About Cielo

Cielo S.A., through its subsidiaries, provides payment services in Brazil and the United States. The company provides services related to credit and debit cards, and other payment methods, including signing up of merchants and service providers; rental, installation, and maintenance of point-of-sale terminals; and data capture and processing of electronic and manual transactions, as well as the issuance and management of payment accounts. It also offers services related to the processing means of payments that involve cards, maintenance services, and contacts with merchants for acceptance of credit and debit cards; development and licensing of computer software; electronic transactions processing; and technology services for collection and management of accounts payable and receivable using the Internet. The company was formerly known as Companhia Brasileira de Meios de Pagamento and changed its name to Cielo S.A. in December 2009. Cielo S.A. was founded in 1995 and is headquartered in Barueri, Brazil.