Evertec (NYSE:EVTC) & PagSeguro Digital (NYSE:PAGS) Financial Comparison

Evertec (NYSE:EVTC) and PagSeguro Digital (NYSE:PAGS) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for Evertec and PagSeguro Digital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Evertec 0 0 3 0 3.00
PagSeguro Digital 0 3 8 0 2.73

Evertec presently has a consensus price target of $33.67, indicating a potential upside of 6.61%. PagSeguro Digital has a consensus price target of $42.25, indicating a potential downside of 7.51%. Given Evertec’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Evertec is more favorable than PagSeguro Digital.

Valuation & Earnings

This table compares Evertec and PagSeguro Digital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Evertec $453.87 million 5.00 $86.27 million $1.70 18.58
PagSeguro Digital $1.14 billion 13.15 $248.78 million $0.88 51.91

PagSeguro Digital has higher revenue and earnings than Evertec. Evertec is trading at a lower price-to-earnings ratio than PagSeguro Digital, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

79.5% of Evertec shares are held by institutional investors. Comparatively, 53.8% of PagSeguro Digital shares are held by institutional investors. 0.6% of Evertec shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Evertec pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. PagSeguro Digital does not pay a dividend. Evertec pays out 11.8% of its earnings in the form of a dividend.

Profitability

This table compares Evertec and PagSeguro Digital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Evertec 20.55% 60.49% 14.03%
PagSeguro Digital 23.12% 18.82% 10.94%

Volatility and Risk

Evertec has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, PagSeguro Digital has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Summary

Evertec beats PagSeguro Digital on 9 of the 16 factors compared between the two stocks.

Evertec Company Profile

EVERTEC, Inc. engage in transaction processing business serving financial institutions, merchants, corporations, and government agencies in Latin America and the Caribbean. The company operates in four segments: Payment Services – Puerto Rico & Caribbean; Payment Services – Latin America; 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. The company also 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; and EBT services. In addition, it provides business process management solutions comprising core bank processing, network hosting and management, IT consulting services, business process outsourcing, item and cash processing, and fulfillment solutions to financial institutions, and corporate and government customers. The company manages a system of electronic payment networks that process approximately two billion transactions. It sells and distributes its services primarily through a proprietary direct sales force. The company was formerly known as Carib Latam Holdings, Inc. EVERTEC, Inc. was founded in 1988 and is based in San Juan, Puerto Rico.

PagSeguro Digital Company Profile

PagSeguro Digital Ltd. provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, an end-to-end digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; and Free PagSeguro digital account, which centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem. It also offers online gaming and cross-border digital services. In addition, the company offers functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, eWallet, and its (point of sale) POS app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers. Additionally, the company engages in the in-person payment activities through POS devices; and issuance of prepaid cards to clients for spending or withdrawing account balances. It also operates an online platform that facilitates peer-to-peer lending. The company was founded in 2006 and is headquartered in São Paulo, Brazil. PagSeguro Digital Ltd. is a subsidiary of Universo Online S.A.

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