PennyMac Financial Services (NYSE:PFSI – Get Free Report) and Usio (NASDAQ:USIO – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.
Institutional and Insider Ownership
57.9% of PennyMac Financial Services shares are owned by institutional investors. Comparatively, 20.2% of Usio shares are owned by institutional investors. 15.2% of PennyMac Financial Services shares are owned by insiders. Comparatively, 19.0% of Usio shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares PennyMac Financial Services and Usio”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PennyMac Financial Services | $4.36 billion | 0.71 | $501.08 million | $7.28 | 8.16 |
| Usio | $85.39 million | 0.95 | -$2.51 million | ($0.06) | -47.67 |
PennyMac Financial Services has higher revenue and earnings than Usio. Usio is trading at a lower price-to-earnings ratio than PennyMac Financial Services, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and recommmendations for PennyMac Financial Services and Usio, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PennyMac Financial Services | 2 | 4 | 4 | 0 | 2.20 |
| Usio | 0 | 2 | 2 | 0 | 2.50 |
PennyMac Financial Services currently has a consensus target price of $100.00, suggesting a potential upside of 68.28%. Usio has a consensus target price of $5.38, suggesting a potential upside of 87.94%. Given Usio’s stronger consensus rating and higher probable upside, analysts plainly believe Usio is more favorable than PennyMac Financial Services.
Risk & Volatility
PennyMac Financial Services has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, Usio has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500.
Profitability
This table compares PennyMac Financial Services and Usio’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PennyMac Financial Services | 17.74% | 11.18% | 1.65% |
| Usio | -1.63% | -8.20% | -1.26% |
Summary
PennyMac Financial Services beats Usio on 10 of the 14 factors compared between the two stocks.
About PennyMac Financial Services
PennyMac Financial Services, Inc., through its subsidiaries, engages in the mortgage banking and investment management activities in the United States. The company operates through three segments: Production, Servicing, and Investment Management. The Production segment is involved in the origination, acquisition, and sale of loans. This segment sources residential conventional and government-insured or guaranteed mortgage loans through correspondent production, consumer direct lending, and broker direct lending. The Servicing segment performs loan servicing for both newly originated loans that are under holding for sale and loans services for others. The segment performs loan administration, collection, and default management activities, including the collection and remittance of loan payments; responds to customer inquiries; provides accounting for principal and interest; holds custodial funds for the payment of property taxes and insurance premiums; counsels delinquent borrowers; and supervising foreclosures and property dispositions, as well as administers loss mitigation activities, such as modification and forbearance programs. The Investment Management segment is involved in sourcing, performing diligence, bidding, and closing investment asset acquisitions; managing correspondent production activities for PennyMac Mortgage Investment Trust; and managing acquired assets. The company was founded in 2008 and is headquartered in Westlake Village, California.
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.
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