TriNet Group (TNET) versus First Data (FDC) Critical Survey

TriNet Group (NYSE:TNET) and First Data (NYSE:FDC) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, earnings, analyst recommendations, dividends, institutional ownership and profitability.

Insider & Institutional Ownership

85.6% of TriNet Group shares are held by institutional investors. Comparatively, 51.5% of First Data shares are held by institutional investors. 38.9% of TriNet Group shares are held by insiders. Comparatively, 5.6% of First Data shares are held by 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.

Risk and Volatility

TriNet Group has a beta of 2.4, meaning that its share price is 140% more volatile than the S&P 500. Comparatively, First Data has a beta of 1.94, meaning that its share price is 94% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for TriNet Group and First Data, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TriNet Group 0 2 1 0 2.33
First Data 0 3 22 0 2.88

TriNet Group presently has a consensus price target of $58.33, suggesting a potential upside of 23.27%. First Data has a consensus price target of $27.13, suggesting a potential upside of 44.67%. Given First Data’s stronger consensus rating and higher possible upside, analysts clearly believe First Data is more favorable than TriNet Group.

Profitability

This table compares TriNet Group and First Data’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TriNet Group 6.67% 63.58% 8.18%
First Data 17.48% 19.33% 2.65%

Earnings & Valuation

This table compares TriNet Group and First Data’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TriNet Group $3.28 billion 1.02 $178.00 million $1.72 27.51
First Data $12.05 billion 1.45 $1.47 billion $1.28 14.65

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

About TriNet Group

TriNet Group, Inc. provides human resources solutions for small and midsize businesses in the United States and Canada. The company offers multi-state payroll processing and tax administration; employee benefits programs, including health insurance and retirement plans; workers compensation insurance and claims management; employment and benefit law compliance; and other services. It serves clients in various industries, including technology, life sciences, not-for-profit, professional services, financial services, property management, retail, manufacturing, and hospitality. The company markets its solutions through its sales representatives. TriNet Group, Inc. was founded in 1988 and is headquartered in San Leandro, California.

About First Data

First Data Corporation provides electronic commerce solutions for merchants, financial institutions, and card issuers worldwide. It operates through three segments: Global Business Solutions (GBS), Global Financial Solutions (GFS), and Network & Security Solutions (NSS). The GBS segment offers retail point-of-sale merchant acquiring and e-commerce services; and mobile payment services, as well as its cloud-based Clover point-of-sale operating system, which includes a marketplace for proprietary and third-party business applications. The GFS segment provides technology solutions for bank and non-bank issuers comprising credit, retail private label, commercial card, and loan processing; licensed financial software systems, such as VisionPLUS processing application; and account services, including card personalization and embossing, customer communications, remittance processing, professional services, and customer servicing consisting of call center solutions and back office processing. The NSS segment offers a range of value-added solutions that include electronic funds transfer network solutions comprising debit card processing solutions; stored value network solutions; and gift, and security and fraud solutions. This segment also supports online and mobile banking, as well as its business supporting mobile wallets. The company was founded in 1989 and is headquartered in Atlanta, Georgia.

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