Critical Survey: Acacia Research (NASDAQ:ACTG) & Fiserv (NASDAQ:FISV)

Fiserv (NASDAQ:FISV) and Acacia Research (NASDAQ:ACTG) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Institutional and Insider Ownership

91.0% of Fiserv shares are owned by institutional investors. Comparatively, 86.7% of Acacia Research shares are owned by institutional investors. 0.1% of Fiserv shares are owned by insiders. Comparatively, 1.7% of Acacia Research shares are owned by 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.

Profitability

This table compares Fiserv and Acacia Research’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fiserv	-18.91%	15.76%	5.02%
Acacia Research	-5.39%	0.44%	0.33%

Analyst Recommendations

This is a summary of recent ratings for Fiserv and Acacia Research, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fiserv	5	19	6	0	2.03
Acacia Research	1	0	1	0	2.00

Fiserv currently has a consensus target price of $63.11, suggesting a potential upside of 0.37%. Acacia Research has a consensus target price of $6.00, suggesting a potential upside of 41.18%. Given Acacia Research’s higher probable upside, analysts clearly believe Acacia Research is more favorable than Fiserv.

Valuation and Earnings

This table compares Fiserv and Acacia Research”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fiserv	$20.80 billion	1.61	$3.48 billion	($7.42)	-8.47
Acacia Research	$278.37 million	1.49	$21.68 million	($0.15)	-28.33

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

Volatility & Risk

Fiserv has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Acacia Research has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Summary

Fiserv beats Acacia Research on 10 of the 14 factors compared between the two stocks.

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.

About Acacia Research

Acacia is a publicly traded (Nasdaq: ACTG) company that is focused on acquiring and operating businesses across the industrial, energy and technology sectors where it believes it can leverage its expertise, significant capital base, and deep industry relationships to drive value. Acacia evaluates opportunities based on the attractiveness of the underlying cash flows, without regard to a specific investment horizon. Acacia operates its businesses based on three key principles of people, process, and performance and has built a management team with demonstrated expertise in research, transactions and execution, and operations and management.