Financial Analysis: Envestnet (NYSE:ENV) & First Data (NYSE:FDC)

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

Profitability

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

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

Volatility and Risk

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

Analyst Recommendations

This is a breakdown of current ratings for Envestnet and First Data, as provided by MarketBeat.

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

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

Insider & Institutional Ownership

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

Earnings and Valuation

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

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

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.

Summary

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

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.

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.

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