National CineMedia (NCMI) versus Global Payments (GPN) Critical Survey

National CineMedia (NASDAQ: NCMI) and Global Payments (NYSE:GPN) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.

Risk & Volatility

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National CineMedia has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, Global Payments has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for National CineMedia and Global Payments, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National CineMedia 1 4 2 0 2.14
Global Payments 2 2 23 0 2.78

National CineMedia presently has a consensus price target of $7.92, suggesting a potential upside of 46.88%. Global Payments has a consensus price target of $109.38, suggesting a potential downside of 3.61%. Given National CineMedia’s higher probable upside, research analysts plainly believe National CineMedia is more favorable than Global Payments.

Dividends

National CineMedia pays an annual dividend of $0.68 per share and has a dividend yield of 12.6%. Global Payments pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. National CineMedia pays out 3,400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Global Payments pays out 1.3% of its earnings in the form of a dividend.

Insider and Institutional Ownership

87.1% of National CineMedia shares are owned by institutional investors. Comparatively, 96.7% of Global Payments shares are owned by institutional investors. 5.4% of National CineMedia shares are owned by company insiders. Comparatively, 0.9% of Global Payments shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares National CineMedia and Global Payments’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National CineMedia $426.10 million 1.00 $1.60 million $0.02 269.50
Global Payments $3.98 billion 4.55 $468.42 million $2.98 38.08

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

Profitability

This table compares National CineMedia and Global Payments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National CineMedia 0.12% -55.42% 2.25%
Global Payments 11.78% 17.94% 5.36%

Summary

Global Payments beats National CineMedia on 12 of the 16 factors compared between the two stocks.

About National CineMedia

National CineMedia, Inc. (NCM, Inc.) is a holding company that manages its consolidated subsidiary National CineMedia, LLC (NCM LLC). The Company operates digital in-theater network in North America, allowing NCM LLC to sell advertising and certain third-party theater circuits under long-term network affiliate agreements. It is engaged in the sale of advertising to national, regional and local businesses in First Look, its cinema advertising and entertainment pre-show seen on movie screens across the United States It also sells advertising on its Lobby Entertainment Network (LEN), a series of screens located in movie theater lobbies, as well as other forms of advertising and promotions in theater lobbies. The Company sells online and mobile advertising through its Cinema Accelerator digital product to reach entertainment audiences beyond the theater. In-theater advertising and entertainment content is distributed across NCM LLC’s national theater network.

About Global Payments

Global Payments Inc. is a provider of payment technology services. The Company provides payment and digital commerce solutions. The Company operates through three segments: North America, Europe and Asia-Pacific. The Company’s segments primarily provide payment solutions for credit cards, debit cards, electronic payments and check-related services. The Company’s segments target customers in various industries, including financial services, gaming, government, healthcare, professional services, restaurants, retail, universities, not-for-profit organizations and utilities. It provides services across a range of channels to merchants and partners in over 30 countries throughout North America, Europe, the Asia-Pacific region and Brazil. The Company performs a series of services, including authorization, electronic draft capture, file transfers to facilitate funds settlement and certain exception-based, back office support services, such as chargeback and retrieval resolution.

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