UWM (NYSE:UWMC) and Jack Henry & Associates (NASDAQ:JKHY) Critical Contrast

Jack Henry & Associates (NASDAQ:JKHY) and UWM (NYSE:UWMC) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, institutional ownership, dividends, earnings, analyst recommendations and valuation.

Earnings & Valuation

This table compares Jack Henry & Associates and UWM”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jack Henry & Associates	$2.54 billion	4.07	$502.78 million	$6.97	21.20
UWM	$3.16 billion	0.61	$27.38 million	($0.08)	-15.06

Jack Henry & Associates has higher earnings, but lower revenue than UWM. UWM is trading at a lower price-to-earnings ratio than Jack Henry & Associates, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Jack Henry & Associates has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500. Comparatively, UWM has a beta of 1.76, meaning that its stock price is 76% more volatile than the S&P 500.

Dividends

Jack Henry & Associates pays an annual dividend of $2.44 per share and has a dividend yield of 1.7%. UWM pays an annual dividend of $0.40 per share and has a dividend yield of 33.2%. Jack Henry & Associates pays out 35.0% of its earnings in the form of a dividend. UWM pays out -500.0% 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. Jack Henry & Associates has increased its dividend for 35 consecutive years. UWM is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Jack Henry & Associates and UWM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jack Henry & Associates	19.76%	23.49%	16.34%
UWM	-1.04%	-6.20%	-0.50%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Jack Henry & Associates and UWM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jack Henry & Associates	0	5	12	1	2.78
UWM	2	6	6	0	2.29

Jack Henry & Associates currently has a consensus price target of $192.18, suggesting a potential upside of 30.07%. UWM has a consensus price target of $4.01, suggesting a potential upside of 233.08%. Given UWM’s higher possible upside, analysts clearly believe UWM is more favorable than Jack Henry & Associates.

Institutional and Insider Ownership

98.8% of Jack Henry & Associates shares are owned by institutional investors. Comparatively, 53.6% of UWM shares are owned by institutional investors. 0.6% of Jack Henry & Associates shares are owned by company insiders. Comparatively, 80.9% of UWM shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Jack Henry & Associates beats UWM on 12 of the 18 factors compared between the two stocks.

About Jack Henry & Associates

Jack Henry & Associates, Inc. is a financial technology company, which engages in the provision of technology solutions and payment processing services. It operates through the following segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer and member information. The Payments segment includes secure payment processing tools and services including ATM, debit, and credit card processing services, online and mobile bill pay solutions, ACH origination and remote deposit capture processing, and risk management products and services. The Complementary segment focuses on additional software, hosted processing platforms, and services including call center support, network security management, consulting, and monitoring. The Corporate and Other segment offers hardware and other products. The company was founded by Jerry D. Hall and John W. Henry in 1976 and is headquartered in Monett, MO.

About UWM

UWM Holdings Corporation engages in the residential mortgage lending business in the United States. The company offers mortgage loans through wholesale channel. It originates primarily conforming and government loans. UWM Holdings Corporation was founded in 1986 and is headquartered in Pontiac, Michigan.