Fiserv (NASDAQ:FISV) & Fidelity National Information Services (NYSE:FIS) Critical Review

Fiserv (NASDAQ:FISV) and Fidelity National Information Services (NYSE:FIS) are both large-cap business services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Profitability

This table compares Fiserv and Fidelity National Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fiserv	17.05%	19.47%	6.43%
Fidelity National Information Services	1.45%	19.76%	8.73%

Insider and Institutional Ownership

91.0% of Fiserv shares are held by institutional investors. Comparatively, 96.2% of Fidelity National Information Services shares are held by institutional investors. 1.0% of Fiserv shares are held by company insiders. Comparatively, 0.2% of Fidelity National Information Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Fiserv and Fidelity National Information Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fiserv	3	23	10	0	2.19
Fidelity National Information Services	1	7	12	0	2.55

Fiserv currently has a consensus price target of $121.08, indicating a potential upside of 78.22%. Fidelity National Information Services has a consensus price target of $85.41, indicating a potential upside of 29.38%. Given Fiserv’s higher possible upside, equities analysts clearly believe Fiserv is more favorable than Fidelity National Information Services.

Earnings & Valuation

This table compares Fiserv and Fidelity National Information Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fiserv	$20.46 billion	1.81	$3.13 billion	$6.47	10.50
Fidelity National Information Services	$10.13 billion	3.38	$1.45 billion	$0.27	244.50

Fiserv has higher revenue and earnings than Fidelity National Information Services. Fiserv is trading at a lower price-to-earnings ratio than Fidelity National Information Services, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Fiserv has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Fidelity National Information Services has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Summary

Fidelity National Information Services beats Fiserv on 8 of the 14 factors compared between the two stocks.

About Fiserv

Fiserv, Inc., together with its subsidiaries, provides payments and financial services technology services in the United States, Europe, the Middle East and Africa, Latin America, the Asia-Pacific, and internationally. It operates through Merchant Acceptance, Financial Technology, and Payments and Network segments. The Merchant Acceptance segment provides merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Clover, a cloud based POS and integrated commerce operating system for small and mid-sized businesses and independent software vendors; and Carat, an integrated operating system for large businesses. This segment distributes through various channels, including direct sales teams, strategic partnerships with agent sales forces, independent software vendors, financial institutions, and other strategic partners in the form of joint venture alliances, revenue sharing alliances, and referral agreement. The Financial Technology segment offers customer deposit and loan accounts, as well as manages an institution's general ledger and central information files. This segment also provides digital banking, financial and risk management, professional services and consulting, check processing, and other products and services. The Payments and Network segment offers card transactions, such as debit, credit, and prepaid card processing and services; funds access, debit payments, cardless ATM access, and surcharge-free ATM network; security and fraud protection products; card production; print services; and various network services, as well as non-card digital payment software and services, including bill payment, account-to-account transfers, person-to-person payments, electronic billing, and security and fraud protection products. It serves merchants, banks, credit unions, other financial institutions, and corporate clients. Fiserv, Inc. was incorporated in 1984 and is headquartered in Milwaukee, Wisconsin.

About Fidelity National Information Services

Fidelity National Information Services, Inc. engages in the provision of financial services technology solutions for financial institutions, businesses, and developers worldwide. It operates through Banking Solutions, Capital Market Solutions, and Corporate and Other segments. The company provides core processing and ancillary applications; mobile and online banking; fraud, risk management, and compliance; card and retail payment; electronic funds transfer and network; wealth and retirement; and item processing and output solutions. It also offers trading and asset, lending, leveraged and syndicated loan markets, and treasury and risk solutions. The company was founded in 1968 and is headquartered in Jacksonville, Florida.