Global Payments (NYSE:GPN) and TriNet Group (NYSE:TNET) Critical Survey

Global Payments (NYSE:GPN) and TriNet Group (NYSE:TNET) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Global Payments and TriNet Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Global Payments 7.79% 6.46% 3.83%
TriNet Group 6.05% 48.47% 9.26%

Institutional and Insider Ownership

87.4% of Global Payments shares are owned by institutional investors. Comparatively, 91.8% of TriNet Group shares are owned by institutional investors. 0.9% of Global Payments shares are owned by company insiders. Comparatively, 37.0% of TriNet Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Global Payments has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, TriNet Group has a beta of 1.93, meaning that its share price is 93% more volatile than the S&P 500.

Earnings and Valuation

This table compares Global Payments and TriNet Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Global Payments $4.91 billion 10.74 $430.61 million $5.86 30.10
TriNet Group $3.86 billion 0.85 $212.00 million $2.90 16.84

Global Payments has higher revenue and earnings than TriNet Group. TriNet Group is trading at a lower price-to-earnings ratio than Global Payments, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Global Payments and TriNet Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Global Payments 1 2 28 0 2.87
TriNet Group 0 1 2 0 2.67

Global Payments presently has a consensus target price of $193.69, suggesting a potential upside of 9.80%. TriNet Group has a consensus target price of $62.00, suggesting a potential upside of 26.97%. Given TriNet Group’s higher possible upside, analysts clearly believe TriNet Group is more favorable than Global Payments.

Summary

Global Payments beats TriNet Group on 8 of the 14 factors compared between the two stocks.

About Global Payments

Global Payments Inc. provides payment technology and software solutions for card, electronic, check, and digital-based payments. The company operates in three segments: North America, Europe, and Asia-Pacific. It offers authorization services, settlement and funding services, customer support and help-desk functions, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and statements, and online reporting services. The company also provides an array of enterprise software solutions that streamline business operations of its customers in various vertical markets; and value-added services, such as analytic and engagement tools, as well as payroll services. In addition, it offers credit and debit card transaction processing services for various international card brands, including American Express, Discover Card, JCB, MasterCard, UnionPay International, and Visa; and non-traditional payment methods, as well as certain domestic debit networks, such as Interac in Canada. Further, the company provides e-commerce and omnichannel solutions; and gaming solutions to licensed gaming operators. It serves customers in various industries comprising education, restaurant, event management, hospitality, retail, healthcare, convenience stores and petroleum, professional services, automotive, and lodging. The company markets its products and services through direct sales force, trade associations, agent and enterprise software providers, referral arrangements with value-added resellers, and independent sales organizations in 32 countries of North America, Europe, the Asia-Pacific region, and Brazil. Global Payments Inc. was founded in 1967 and is headquartered in Atlanta, Georgia.

About TriNet Group

TriNet Group, Inc. provides human resources solutions for small and midsize businesses in the United States and Canada. The company offers multi-state payroll processing and tax administration; employee benefits programs, including health insurance and retirement plans; workers compensation insurance and claims management; employment and benefit law compliance; and other services. It serves clients in various industries, including technology, life sciences, not-for-profit, professional services, financial services, property management, retail, manufacturing, and hospitality. The company markets its solutions through its sales representatives. TriNet Group, Inc. was founded in 1988 and is headquartered in Dublin, California.

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