Reviewing Usio (NASDAQ:USIO) & Shift4 Payments (NYSE:FOUR)

Usio (NASDAQ:USIO) and Shift4 Payments (NYSE:FOUR) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Usio and Shift4 Payments, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Usio	1	0	1	0	2.00
Shift4 Payments	0	5	14	2	2.86

Usio presently has a consensus target price of $4.00, indicating a potential upside of 122.22%. Shift4 Payments has a consensus target price of $116.70, indicating a potential upside of 9.53%. Given Usio’s higher possible upside, equities analysts plainly believe Usio is more favorable than Shift4 Payments.

Profitability

This table compares Usio and Shift4 Payments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Usio	3.95%	0.74%	0.12%
Shift4 Payments	6.50%	32.97%	7.17%

Institutional and Insider Ownership

20.2% of Usio shares are owned by institutional investors. Comparatively, 98.9% of Shift4 Payments shares are owned by institutional investors. 17.8% of Usio shares are owned by company insiders. Comparatively, 25.2% of Shift4 Payments shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Usio and Shift4 Payments”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Usio	$82.93 million	0.58	$3.31 million	$0.11	16.36
Shift4 Payments	$3.47 billion	2.72	$229.60 million	$2.96	36.00

Shift4 Payments has higher revenue and earnings than Usio. Usio is trading at a lower price-to-earnings ratio than Shift4 Payments, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Usio has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, Shift4 Payments has a beta of 1.8, meaning that its stock price is 80% more volatile than the S&P 500.

Summary

Shift4 Payments beats Usio on 14 of the 15 factors compared between the two stocks.

About Usio

Usio, Inc., together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States. The company offers various types of automated clearing house (ACH) processing; and credit, prepaid card, and debit card-based processing services. Its ACH transaction processing services include Represented Check and Check Conversion for electronic payment facilitation. In addition, the company offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a website or retail services accessed through a physical terminal. Further, it provides a proprietary web-based customer service application that allows companies to process one-time and recurring payments through e-checks or credit cards; and an interactive voice response telephone system to companies, which accept payments directly from consumers over the telephone using e-checks or credit cards. Additionally, the company offers prepaid and incentive card issuance services; and operates a prepaid core processing platform, as well as provides additional services, such as electronic bill presentment, document composition, document decomposition, and printing and mailing services for various industry verticals, including utilities and financial institutions. It markets and sells ACH products and services primarily through resellers; and prepaid card program directly to government entities, corporations, and to consumers through the internet. The company was formerly known as Payment Data Systems, Inc. and changed its name to Usio, Inc. in June 2019. Usio, Inc. was incorporated in 1998 and is headquartered in San Antonio, Texas.

About Shift4 Payments

Shift4 Payments, Inc. (NYSE FOUR) provides integrated payment processing and technology solutions in the United States. Its payments platform provides omni-channel card acceptance and processing solutions, including end-to-end payment processing for various payment types; merchant acquiring; proprietary omni-channel gateway; complementary software integrations; integrated and mobile point-of-sale (POS) solutions; security and risk management solutions; and reporting and analytical tools, as well as tokenization, risk management/underwriting, payment device and chargeback management, fraud prevention, and gift card solutions. The company also offers suite of technology solutions, such as Lighthouse, a cloud-based business intelligence tool that includes customer engagement, social media management, online reputation management, scheduling, and product pricing, as well as reporting and analytics; integrated POS for merchants business; and Skytab, a mobile payment solution. In addition, it provides marketplace technology that enable seamless integrations into third-party applications, which includes online delivery services, payroll, timekeeping, and other human resource services. Further, the company offers merchant management, training and education, marketing management, and incentives tracking solutions. Additionally, it provides merchant underwriting, onboarding and activation, training, risk management, and support services; and software integrations and compliance management, and partner support and services. The company was founded in 1998 and is headquartered in Allentown, Pennsylvania.