First Data (NYSE:FDC) and Envestnet (NYSE:ENV) Financial Contrast

First Data (NYSE:FDC) and Envestnet (NYSE:ENV) are both business services companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Insider and Institutional Ownership

53.3% of First Data shares are owned by institutional investors. Comparatively, 89.4% of Envestnet shares are owned by institutional investors. 4.9% of First Data shares are owned by insiders. Comparatively, 5.0% of Envestnet shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
First Data 10.52% 17.55% 2.67%
Envestnet -1.72% 9.15% 4.22%

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Data $9.50 billion 0.00 $1.01 billion $1.21 N/A
Envestnet $812.36 million 3.78 $5.76 million $1.25 47.02

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for First Data and Envestnet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Data 0 19 2 0 2.10
Envestnet 0 3 6 1 2.80

First Data currently has a consensus target price of $24.66, suggesting a potential upside of ∞. Envestnet has a consensus target price of $73.78, suggesting a potential upside of 25.52%. Given First Data’s higher probable upside, analysts plainly believe First Data is more favorable than Envestnet.

Volatility & Risk

First Data has a beta of 1.93, indicating that its stock price is 93% more volatile than the S&P 500. Comparatively, Envestnet has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500.

Summary

Envestnet beats First Data on 8 of the 14 factors compared between the two stocks.

About First Data

First Data Corporation provides commerce enabled technology and solutions for merchants, financial institutions, and card issuers in the United States, Canada, Europe, the Middle East, Africa, Latin America, and the Asia Pacific. The company operates through three segments: Global Business Solutions, Global Financial Solutions, and Network & Security Solutions. The Global Business Solutions segment provides solutions to merchants, such as retail point of sale merchant acquiring, e-commerce, and mobile payment services, as well as cloud based point of sale operating system that include a marketplace for proprietary and third party applications. The Global Finance Solutions segment provides technology solutions for bank and non-bank issuers, such as credit, retail private label, commercial card, and loan processing, as well as licensed financial software systems; suite of account services that include card personalization and embossing, customer communications, and professional services; and call center solutions and back office processing. The Network & Security Solutions segment offers EFT network, stored value network, and security and fraud solutions, as well as other value added solutions to its clients in GBS and GFS segments, smaller financial institutions, and other enterprise clients. First Data Corporation was founded in 1971 and is headquartered in Atlanta, Georgia.

About Envestnet

Envestnet, Inc., together with its subsidiaries, provides intelligent systems for wealth management and financial wellness in the United States and internationally. It operates through Envestnet and Envestnet | Yodlee segments. The company's product and services suites include Envestnet | Enterprise, which provides an end-to-end open architecture wealth management platform, as well as sells data aggregation and reporting, data analytics, and digital advice capabilities; Envestnet | Tamarac that provides trading, rebalancing, portfolio accounting, performance reporting, and client relationship management software; Envestnet | Retirement Solutions, which offer a suite of services for advisor-sold retirement plans; and Envestnet | Portfolio Management Consultants that provide research, due diligence, and consulting services to assist advisors in creating investment solutions for their clients, and patented portfolio overlay and tax optimization services. It also provides Envestnet | Yodlee data aggregation and data analytics platform, which offers cloud-based innovation for digital financial services. The company primarily serves banks, wealth management and brokerage firms, Internet services companies, and registered investment advisers. Envestnet, Inc. was founded in 1999 and is headquartered in Chicago, Illinois.

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