Contrasting Evertec (NYSE:EVTC) and Expensify (NASDAQ:EXFY)

Expensify (NASDAQ:EXFY) and Evertec (NYSE:EVTC) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Insider & Institutional Ownership

68.4% of Expensify shares are owned by institutional investors. Comparatively, 96.8% of Evertec shares are owned by institutional investors. 11.7% of Expensify shares are owned by insiders. Comparatively, 1.1% of Evertec shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Expensify and Evertec, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Expensify	1	1	0	0	1.50
Evertec	1	4	2	0	2.14

Expensify currently has a consensus target price of $2.50, suggesting a potential upside of 111.86%. Evertec has a consensus target price of $33.20, suggesting a potential upside of 36.22%. Given Expensify’s higher probable upside, equities analysts clearly believe Expensify is more favorable than Evertec.

Valuation & Earnings

This table compares Expensify and Evertec”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Expensify	$140.00 million	0.71	-$21.39 million	($0.23)	-5.13
Evertec	$931.82 million	1.61	$141.59 million	$2.07	11.77

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Expensify	-14.68%	-15.26%	-10.96%
Evertec	13.95%	31.40%	9.36%

Risk & Volatility

Expensify has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500. Comparatively, Evertec has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Summary

Evertec beats Expensify on 11 of the 14 factors compared between the two stocks.

About Expensify

Expensify, Inc. provides a cloud-based expense management software platform to individuals and corporations, small and midsized businesses, and enterprises in the United States and internationally. The company’s platform enables users to manage corporate cards, pay bills, generate invoices, collect payments, and book travel. It also offers track and submit plans for individuals. The company was founded in 2008 and is based in Portland, Oregon.

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.