Critical Analysis: PAR Technology (NYSE:PAR) and Green Dot (NYSE:GDOT)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PAR Technology	-19.21%	-2.56%	-1.58%
Green Dot	-2.33%	9.81%	1.59%

Analyst Ratings

This is a breakdown of recent ratings and target prices for PAR Technology and Green Dot, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PAR Technology	1	2	6	0	2.56
Green Dot	2	4	1	0	1.86

PAR Technology presently has a consensus price target of $64.00, indicating a potential upside of 175.62%. Green Dot has a consensus price target of $12.56, indicating a potential upside of 5.35%. Given PAR Technology’s stronger consensus rating and higher probable upside, equities analysts plainly believe PAR Technology is more favorable than Green Dot.

Volatility and Risk

PAR Technology has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.

Earnings & Valuation

This table compares PAR Technology and Green Dot”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PAR Technology	$440.45 million	2.14	-$4.99 million	($2.14)	-10.85
Green Dot	$1.72 billion	0.38	-$26.70 million	($0.85)	-14.03

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

Insider and Institutional Ownership

92.6% of Green Dot shares are held by institutional investors. 3.7% of PAR Technology 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, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

PAR Technology beats Green Dot on 8 of the 14 factors compared between the two stocks.

About PAR Technology

PAR Technology Corporation, together with its subsidiaries, provides omnichannel cloud-based hardware and software solutions to the restaurant and retail industries worldwide. The Restaurant/Retail segment offers PUNCHH, an enterprise-grade customer loyalty and engagement solution; MENU, an eCommerce platform for restaurant brands; BRINK POS, an open cloud, point-of-sale solution; PAR PAYMENT SERVICES, a merchant services business that enables electronic payment and processing services for businesses; and DATA CENTRAL, a back-office solution that leverages business intelligence and automation technologies. This segment also offers Point-of-Sale Hardware; wireless headsets for drive-thru order-taking; and kitchen display systems, payment devices, cash drawers, printers, and other peripherals. In addition, this segment provides services, such as hardware repair, installation and implementation, training, and on-site and technical support services. The Government segment provides intelligence, surveillance, and reconnaissance solutions; mission systems operations and maintenance, and commercial software products; systems engineering support and software-based solutions; satellite and teleport facility operation and maintenance, engineering, and installation services comprising inside and outside plant services, and maintenance of infrastructure and information systems; satellite ground system support comprising operations and maintenance, sustainment, upgrades, communications security management, anomaly response/resolution, process improvement, emergency response, and disaster recovery services; and information technology infrastructure library services to the United States Department of Defense, intelligence community (IC), and other federal agencies. This segment also offers various IC support services, systems integration, situational awareness solutions, and mission readiness support services. The company was founded in 1968 and is based in New Hartford, New York.

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.