Financial Comparison: Evertec (NYSE:EVTC) & Usio (NASDAQ:USIO)

Evertec (NYSE:EVTC) and Usio (NASDAQ:USIO) are both small-cap business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Evertec and Usio, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evertec	0	5	2	0	2.29
Usio	3	0	1	0	1.50

Evertec presently has a consensus price target of $35.80, indicating a potential upside of 15.42%. Usio has a consensus price target of $4.00, indicating a potential upside of 230.58%. Given Usio’s higher probable upside, analysts plainly believe Usio is more favorable than Evertec.

Earnings & Valuation

This table compares Evertec and Usio”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evertec	$931.82 million	2.05	$141.59 million	$2.19	14.16
Usio	$85.39 million	0.39	-$2.51 million	($0.09)	-13.44

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

Institutional & Insider Ownership

96.8% of Evertec shares are held by institutional investors. Comparatively, 20.2% of Usio shares are held by institutional investors. 1.1% of Evertec shares are held by insiders. Comparatively, 17.8% of Usio shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Evertec and Usio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evertec	15.19%	33.27%	9.86%
Usio	-2.94%	-13.52%	-2.22%

Risk and Volatility

Evertec has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Usio has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500.

Summary

Evertec beats Usio on 11 of the 14 factors compared between the two stocks.

About Evertec

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.

About Usio

Usio, Inc., together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States. The company offers various types of automated clearing house (ACH) processing; and credit, prepaid card, and debit card-based processing services. Its ACH transaction processing services include Represented Check and Check Conversion for electronic payment facilitation. In addition, the company offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a website or retail services accessed through a physical terminal. Further, it provides a proprietary web-based customer service application that allows companies to process one-time and recurring payments through e-checks or credit cards; and an interactive voice response telephone system to companies, which accept payments directly from consumers over the telephone using e-checks or credit cards. Additionally, the company offers prepaid and incentive card issuance services; and operates a prepaid core processing platform, as well as provides additional services, such as electronic bill presentment, document composition, document decomposition, and printing and mailing services for various industry verticals, including utilities and financial institutions. It markets and sells ACH products and services primarily through resellers; and prepaid card program directly to government entities, corporations, and to consumers through the internet. The company was formerly known as Payment Data Systems, Inc. and changed its name to Usio, Inc. in June 2019. Usio, Inc. was incorporated in 1998 and is headquartered in San Antonio, Texas.