Global Payments (NYSE:GPN – Get Free Report) and Cass Information Systems (NASDAQ:CASS – Get Free Report) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.
Profitability
This table compares Global Payments and Cass Information Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Global Payments | 13.61% | 11.94% | 5.45% |
| Cass Information Systems | 11.52% | 9.92% | 0.99% |
Analyst Ratings
This is a breakdown of current ratings and target prices for Global Payments and Cass Information Systems, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Global Payments | 1 | 10 | 16 | 0 | 2.56 |
| Cass Information Systems | 0 | 0 | 1 | 0 | 3.00 |
Dividends
Global Payments pays an annual dividend of $1.00 per share and has a dividend yield of 0.9%. Cass Information Systems pays an annual dividend of $1.24 per share and has a dividend yield of 2.8%. Global Payments pays out 18.8% of its earnings in the form of a dividend. Cass Information Systems pays out 74.7% 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. Cass Information Systems has increased its dividend for 23 consecutive years. Cass Information Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Global Payments and Cass Information Systems”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Global Payments | $9.65 billion | 3.05 | $986.23 million | $5.31 | 21.82 |
| Cass Information Systems | $197.51 million | 3.00 | $30.06 million | $1.66 | 26.34 |
Global Payments has higher revenue and earnings than Cass Information Systems. Global Payments is trading at a lower price-to-earnings ratio than Cass Information Systems, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Global Payments has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, Cass Information Systems has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.
Institutional and Insider Ownership
89.8% of Global Payments shares are held by institutional investors. Comparatively, 59.1% of Cass Information Systems shares are held by institutional investors. 1.0% of Global Payments shares are held by insiders. Comparatively, 2.4% of Cass Information Systems shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Summary
Global Payments beats Cass Information Systems on 12 of the 17 factors compared between the two stocks.
About Global Payments
Global Payments Inc. provides payment technology and software solutions for card, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific. It operates through two segments, Merchant Solutions and Issuer Solutions. The Merchant Solutions segment offers authorization, settlement and funding, customer support, chargeback resolution, terminal rental, sales and deployment, payment security, and consolidated billing and reporting services. This segment also provides an array of enterprise software solutions that streamline business operations of its customers in various vertical markets; and value-added solutions and services, such as point-of-sale software, analytics and customer engagement, payroll and reporting, and human capital management. The Issuer Solutions segment offers solutions that enable financial institutions and retailers to manage their card portfolios through a platform; and commercial payments, account payables, and electronic payment alternatives solutions for businesses and governments. It 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. The company was founded in 1967 and is headquartered in Atlanta, Georgia.
About Cass Information Systems
Cass Information Systems, Inc. provides payment and information processing services to manufacturing, distribution, and retail enterprises in the United States. The company operates through two segments, Information Services and Banking Services. Its services include freight invoice rating, payment processing, auditing, and the generation of accounting and transportation information. The company also processes and pays facility-related invoices, such as electricity, gas, waste, and telecommunications expenses; and provides telecom expense management solutions, as well as church management software solution and on-line platform to provide generosity services for faith-based and non-profit organizations. In addition, the company, through its banking subsidiary, Cass Commercial Bank, provides a range of banking products and services, such as demand, savings, time, and money market deposits; commercial, industrial, commercial real estate, and construction and land development loans; and cash management services to privately held businesses, restaurant franchises, and faith-related ministries. Further, it provides B2B payment platform for clients that require an agile fintech partner. It operates through its banking facility near downtown St. Louis, Missouri; operating branch in the Bridgeton, Missouri; and leased facilities in Colorado Springs, Colorado. The company was formerly known as Cass Commercial Corporation and changed its name to Cass Information Systems, Inc. in January 2001. Cass Information Systems, Inc. was founded in 1906 and is headquartered in Saint Louis, Missouri.
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