Financial Survey: PagSeguro Digital (NYSE:PAGS) and Fidelity National Information Services (NYSE:FIS)

PagSeguro Digital (NYSE:PAGS) and Fidelity National Information Services (NYSE:FIS) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Dividends

PagSeguro Digital pays an annual dividend of $1.04 per share and has a dividend yield of 12.2%. Fidelity National Information Services pays an annual dividend of $1.76 per share and has a dividend yield of 4.3%. PagSeguro Digital pays out 76.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fidelity National Information Services pays out 34.1% of its earnings in the form of a dividend. Fidelity National Information Services has raised its dividend for 1 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for PagSeguro Digital and Fidelity National Information Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PagSeguro Digital	1	4	3	0	2.25
Fidelity National Information Services	1	8	13	0	2.55

PagSeguro Digital currently has a consensus target price of $12.00, suggesting a potential upside of 40.76%. Fidelity National Information Services has a consensus target price of $61.33, suggesting a potential upside of 49.50%. Given Fidelity National Information Services’ stronger consensus rating and higher possible upside, analysts clearly believe Fidelity National Information Services is more favorable than PagSeguro Digital.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PagSeguro Digital	10.40%	16.44%	3.29%
Fidelity National Information Services	23.35%	21.30%	8.60%

Earnings and Valuation

This table compares PagSeguro Digital and Fidelity National Information Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PagSeguro Digital	$3.65 billion	0.65	$379.40 million	$1.36	6.27
Fidelity National Information Services	$10.68 billion	1.99	$382.00 million	$5.16	7.95

Fidelity National Information Services has higher revenue and earnings than PagSeguro Digital. PagSeguro Digital 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.

Institutional & Insider Ownership

45.9% of PagSeguro Digital shares are owned by institutional investors. Comparatively, 96.2% of Fidelity National Information Services shares are owned by institutional investors. 0.3% of Fidelity National Information Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

PagSeguro Digital has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, Fidelity National Information Services has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Summary

Fidelity National Information Services beats PagSeguro Digital on 15 of the 17 factors compared between the two stocks.

About PagSeguro Digital

PagSeguro Digital Ltd., together with its subsidiaries, provides financial technology solutions and services for consumers, individual entrepreneurs, micro-merchants, and small and medium-sized companies in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, a digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; PagBank digital account, which offers payment and banking services through the PagBank mobile app, as well as centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem; and PlugPag, a tool for medium-sized and larger merchants that enables them to connect their point of sale (POS) device directly to their enterprise resource planning software or sales automation system through Bluetooth. It also offers cash-in solutions; online and in-person payment tools; and online gaming and cross-border digital services, as well as issues prepaid, credit, and cash cards. In addition, the company provides functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, POS app, i-Banking App, Super App, and e-commerce support and bill payment services; and PedeFácil, an order management and food delivery app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers. The company was founded in 2006 and is headquartered in São Paulo, Brazil.

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.