Financial Review: Fidelity National Information Services (NYSE:FIS) versus Federal Agricultural Mortgage (NYSE:AGM)

Federal Agricultural Mortgage (NYSE:AGM) and Fidelity National Information Services (NYSE:FIS) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Risk and Volatility

Federal Agricultural Mortgage has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Fidelity National Information Services has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Profitability

This table compares Federal Agricultural Mortgage and Fidelity National Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Federal Agricultural Mortgage	29.98%	18.90%	0.63%
Fidelity National Information Services	27.64%	20.95%	8.13%

Institutional & Insider Ownership

68.0% of Federal Agricultural Mortgage shares are held by institutional investors. Comparatively, 96.2% of Fidelity National Information Services shares are held by institutional investors. 1.9% of Federal Agricultural Mortgage shares are held by insiders. Comparatively, 0.3% of Fidelity National Information Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Federal Agricultural Mortgage pays an annual dividend of $6.40 per share and has a dividend yield of 3.1%. Fidelity National Information Services pays an annual dividend of $1.76 per share and has a dividend yield of 5.9%. Federal Agricultural Mortgage pays out 35.0% of its earnings in the form of a dividend. Fidelity National Information Services pays out 27.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Federal Agricultural Mortgage has increased its dividend for 14 consecutive years and Fidelity National Information Services has increased its dividend for 1 consecutive years. Fidelity National Information Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Federal Agricultural Mortgage and Fidelity National Information Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Federal Agricultural Mortgage	0	2	1	0	2.33
Fidelity National Information Services	2	11	11	0	2.38

Federal Agricultural Mortgage presently has a consensus price target of $255.00, indicating a potential upside of 23.97%. Fidelity National Information Services has a consensus price target of $49.04, indicating a potential upside of 64.36%. Given Fidelity National Information Services’ stronger consensus rating and higher possible upside, analysts clearly believe Fidelity National Information Services is more favorable than Federal Agricultural Mortgage.

Valuation and Earnings

This table compares Federal Agricultural Mortgage 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
Federal Agricultural Mortgage	$410.30 million	5.44	$207.41 million	$18.31	11.23
Fidelity National Information Services	$10.68 billion	1.44	$382.00 million	$6.51	4.58

Fidelity National Information Services has higher revenue and earnings than Federal Agricultural Mortgage. Fidelity National Information Services is trading at a lower price-to-earnings ratio than Federal Agricultural Mortgage, indicating that it is currently the more affordable of the two stocks.

Summary

Fidelity National Information Services beats Federal Agricultural Mortgage on 10 of the 17 factors compared between the two stocks.

About Federal Agricultural Mortgage

Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through four segments: Corporate AgFinance, Farm & Ranch, Rural Utilities, and Renewable Energy. The company’s Agricultural Finance line of business engages in purchasing and retaining eligible loans and securities; guaranteeing the payment of principal and interest on securities that represent interests in or obligations secured by pools of eligible loans; servicing eligible loans; and issuing LTSPCs for eligible loans. Its Rural Infrastructure Finance line of business is involved in the purchase of rural utilities loans and renewable energy loans and guarantees of securities backed by loans, as well as LTSPCs for pools of eligible rural utilities loans; by loans for electric or telecommunications facilities by lenders organized as cooperatives to borrowers; and other financial institutions that are secured by pools of eligible loans. Federal Agricultural Mortgage Corporation was incorporated in 1987 and is headquartered in Washington, the District of Columbia.

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.