Analyzing FirstCash (NASDAQ:FCFS) and Green Dot (NYSE:GDOT)

FirstCash (NASDAQ:FCFS) and Green Dot (NYSE:GDOT) are both business services companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Insider and Institutional Ownership

80.3% of FirstCash shares are owned by institutional investors. Comparatively, 92.6% of Green Dot shares are owned by institutional investors. 14.8% of FirstCash shares are owned by insiders. Comparatively, 1.4% of Green Dot shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for FirstCash and Green Dot, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FirstCash	0	2	4	1	2.86
Green Dot	2	4	1	0	1.86

FirstCash currently has a consensus price target of $169.40, indicating a potential downside of 7.53%. Green Dot has a consensus price target of $12.56, indicating a potential upside of 5.30%. Given Green Dot’s higher probable upside, analysts plainly believe Green Dot is more favorable than FirstCash.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
FirstCash	9.02%	17.99%	8.03%
Green Dot	-2.33%	9.81%	1.59%

Valuation and Earnings

This table compares FirstCash and Green Dot”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FirstCash	$3.66 billion	2.21	$330.38 million	$7.42	24.69
Green Dot	$1.72 billion	0.38	-$26.70 million	($0.85)	-14.04

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

Risk & Volatility

FirstCash has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Summary

FirstCash beats Green Dot on 12 of the 15 factors compared between the two stocks.

About FirstCash

FirstCash Holdings, Inc, together with its subsidiaries, operates retail pawn stores in the United States, Mexico, and rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments. Its pawn stores lend money on the collateral of pledged personal property, including jewelry, electronics, tools, appliances, sporting goods, and musical instruments; and retails merchandise acquired through collateral forfeitures on forfeited pawn loans and over-the-counter purchases of merchandise directly from customers. The company also provides retail POS payment solutions, which focuses on LTO products and facilitating other retail financing payment options across the network of traditional and e-commerce merchant partners. It serves cash and credit-constrained consumers. The company was formerly known as FirstCash, Inc and changed its name to FirstCash Holdings, Inc. in December 2021. FirstCash Holdings, Inc was incorporated in 1988 and is headquartered in Fort Worth, Texas.

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.