Contrasting Cass Information Systems (NASDAQ:CASS) & Fiserv (NYSE:FI)

Cass Information Systems (NASDAQ:CASS) and Fiserv (NYSE:FI) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations for Cass Information Systems and Fiserv, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cass Information Systems	0	0	1	0	3.00
Fiserv	0	3	21	2	2.96

Cass Information Systems currently has a consensus price target of $45.00, indicating a potential upside of 7.17%. Fiserv has a consensus price target of $222.88, indicating a potential upside of 8.17%. Given Fiserv’s higher possible upside, analysts plainly believe Fiserv is more favorable than Cass Information Systems.

Profitability

This table compares Cass Information Systems and Fiserv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cass Information Systems	11.52%	9.92%	0.99%
Fiserv	15.22%	17.10%	5.61%

Dividends

Cass Information Systems pays an annual dividend of $1.24 per share and has a dividend yield of 3.0%. Fiserv pays an annual dividend of $0.30 per share and has a dividend yield of 0.1%. Cass Information Systems pays out 74.7% of its earnings in the form of a dividend. Fiserv pays out 5.8% 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.

Volatility and Risk

Cass Information Systems has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Fiserv has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Valuation & Earnings

This table compares Cass Information Systems and Fiserv”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cass Information Systems	$190.07 million	3.00	$30.06 million	$1.66	25.30
Fiserv	$383.42 million	305.74	$3.07 billion	$5.20	39.63

Fiserv has higher revenue and earnings than Cass Information Systems. Cass Information Systems is trading at a lower price-to-earnings ratio than Fiserv, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

59.1% of Cass Information Systems shares are owned by institutional investors. Comparatively, 91.0% of Fiserv shares are owned by institutional investors. 2.4% of Cass Information Systems shares are owned by company insiders. Comparatively, 0.8% of Fiserv shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Fiserv beats Cass Information Systems on 14 of the 18 factors compared between the two stocks.

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.

About Fiserv

Fiserv, Inc., together with its subsidiaries, provides payments and financial services technology services in the United States, Europe, the Middle East and Africa, Latin America, the Asia-Pacific, and internationally. It operates through Merchant Acceptance, Financial Technology, and Payments and Network segments. The Merchant Acceptance segment provides merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Clover, a cloud based POS and integrated commerce operating system for small and mid-sized businesses and independent software vendors; and Carat, an integrated operating system for large businesses. This segment distributes through various channels, including direct sales teams, strategic partnerships with agent sales forces, independent software vendors, financial institutions, and other strategic partners in the form of joint venture alliances, revenue sharing alliances, and referral agreement. The Financial Technology segment offers customer deposit and loan accounts, as well as manages an institution's general ledger and central information files. This segment also provides digital banking, financial and risk management, professional services and consulting, check processing, and other products and services. The Payments and Network segment offers card transactions, such as debit, credit, and prepaid card processing and services; funds access, debit payments, cardless ATM access, and surcharge-free ATM network; security and fraud protection products; card production; print services; and various network services, as well as non-card digital payment software and services, including bill payment, account-to-account transfers, person-to-person payments, electronic billing, and security and fraud protection products. It serves merchants, banks, credit unions, other financial institutions, and corporate clients. Fiserv, Inc. was incorporated in 1984 and is headquartered in Milwaukee, Wisconsin.