Contrasting Green Dot (NYSE:GDOT) & Paymentus (NYSE:PAY)

Paymentus (NYSE:PAY) and Green Dot (NYSE:GDOT) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Valuation and Earnings

This table compares Paymentus and Green Dot”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paymentus	$871.74 million	4.09	$44.17 million	$0.46	61.78
Green Dot	$1.72 billion	0.39	-$26.70 million	($0.85)	-14.24

Paymentus has higher earnings, but lower revenue than Green Dot. Green Dot is trading at a lower price-to-earnings ratio than Paymentus, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Paymentus and Green Dot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Paymentus	5.29%	12.68%	10.68%
Green Dot	-2.33%	9.81%	1.59%

Risk & Volatility

Paymentus has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Insider and Institutional Ownership

78.4% of Paymentus shares are held by institutional investors. Comparatively, 92.6% of Green Dot shares are held by institutional investors. 87.8% of Paymentus shares are held by insiders. Comparatively, 1.4% of Green Dot shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Paymentus and Green Dot, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paymentus	0	4	4	0	2.50
Green Dot	2	5	1	0	1.88

Paymentus currently has a consensus target price of $37.50, indicating a potential upside of 31.96%. Green Dot has a consensus target price of $12.56, indicating a potential upside of 3.81%. Given Paymentus’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Paymentus is more favorable than Green Dot.

Summary

Paymentus beats Green Dot on 12 of the 14 factors compared between the two stocks.

About Paymentus

Paymentus Holdings, Inc. provides cloud-based bill payment technology and solutions in the United States and internationally. The company offers electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management to billers through a software-as-a-service technology platform. Its platform's payment processing includes credit cards, debit cards, eChecks, and digital wallets. It serves utility, financial service, government, insurance, telecommunication, real estate management, education, consumer finance, healthcare, and small business industries. The company was founded in 2004 and is headquartered in Charlotte, North Carolina.

About Green Dot

Green Dot Corporation, a financial technology and registered bank holding company, provides various financial services to consumers and businesses in the United States. It operates through three segments: Consumer Services, Business to Business Services, and Money Movement Services. The company provides deposit account programs, including consumer and small business checking account products, network-branded reloadable prepaid debit cards and gift cards, and secured credit programs. It offers money processing services, such as cash transfer services that enable consumers to deposit or pick up cash and pay bills with cash at the point-of-sale at any participating retailer; and simply paid disbursement services, which enable wages and authorized funds disbursement to its deposit account programs and accounts issued by any third-party bank or program manager. In addition, the company offers tax processing services comprising tax refund transfers, which provide the processing technology to facilitate receipt of a taxpayers' refund proceeds; small business lending to independent tax preparation providers that seek small advances; and fast cash advance, a loan that enables tax refund recipients. Green Dot Corporation was incorporated in 1999 and is headquartered in Austin, Texas.