Equitable (NYSE:EQH – Get Free Report) and Evertec (NYSE:EVTC – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, profitability, risk, institutional ownership and earnings.
Risk and Volatility
Equitable has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500. Comparatively, Evertec has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.
Insider & Institutional Ownership
92.7% of Equitable shares are owned by institutional investors. Comparatively, 96.8% of Evertec shares are owned by institutional investors. 1.0% of Equitable shares are owned by insiders. Comparatively, 1.1% of Evertec shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Dividends
Equitable pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Evertec pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Equitable pays out -36.3% of its earnings in the form of a dividend. Evertec pays out 13.0% 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. Equitable has raised its dividend for 2 consecutive years. Equitable is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Equitable and Evertec’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Equitable | -8.72% | 511.35% | 0.61% |
| Evertec | 9.80% | 32.07% | 9.12% |
Analyst Ratings
This is a summary of current recommendations and price targets for Equitable and Evertec, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Equitable | 0 | 3 | 10 | 1 | 2.86 |
| Evertec | 0 | 4 | 2 | 0 | 2.33 |
Equitable currently has a consensus target price of $63.18, suggesting a potential upside of 17.35%. Evertec has a consensus target price of $35.00, suggesting a potential upside of 10.61%. Given Equitable’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Equitable is more favorable than Evertec.
Valuation & Earnings
This table compares Equitable and Evertec”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Equitable | $10.62 billion | 1.38 | -$1.38 billion | ($3.31) | -16.27 |
| Evertec | $996.16 million | 1.90 | $141.59 million | $1.54 | 20.55 |
Evertec has lower revenue, but higher earnings than Equitable. Equitable is trading at a lower price-to-earnings ratio than Evertec, indicating that it is currently the more affordable of the two stocks.
Summary
Equitable beats Evertec on 10 of the 18 factors compared between the two stocks.
About Equitable
Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, New York.
About Evertec
EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.
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