Head-To-Head Review: Evertec (NYSE:EVTC) and Paymentus (NYSE:PAY)

Paymentus (NYSE:PAY) and Evertec (NYSE:EVTC) are both mid-cap business services companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Analyst Ratings

This is a summary of recent ratings for Paymentus and Evertec, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Paymentus	0	4	2	1	2.57
Evertec	0	2	3	0	2.60

Paymentus currently has a consensus target price of $36.80, suggesting a potential upside of 18.40%. Evertec has a consensus target price of $40.00, suggesting a potential upside of 7.65%. Given Paymentus’ higher possible upside, equities research analysts clearly believe Paymentus is more favorable than Evertec.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Paymentus	5.28%	12.22%	10.36%
Evertec	14.89%	38.45%	10.24%

Volatility and Risk

Paymentus has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500. Comparatively, Evertec has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Institutional and Insider Ownership

78.4% of Paymentus shares are held by institutional investors. Comparatively, 96.8% of Evertec shares are held by institutional investors. 87.8% of Paymentus shares are held by company insiders. Comparatively, 0.6% of Evertec shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Paymentus and Evertec”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paymentus	$871.74 million	4.46	$44.17 million	$0.39	79.69
Evertec	$845.49 million	2.80	$112.62 million	$1.99	18.67

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

Summary

Paymentus beats Evertec on 8 of the 15 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 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.