Total System Services (NYSE: TSS) and IMS Health Holdings (NYSE:IMS) are both business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Profitability

This table compares Total System Services and IMS Health Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Total System Services 8.78% 25.49% 8.62%
IMS Health Holdings 2.99% 5.62% 1.22%

Dividends

Total System Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.8%. IMS Health Holdings does not pay a dividend. Total System Services pays out 25.4% of its earnings in the form of a dividend.

Volatility & Risk

Total System Services has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, IMS Health Holdings has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Total System Services and IMS Health Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Total System Services 1 8 13 0 2.55
IMS Health Holdings 0 0 0 0 N/A

Total System Services presently has a consensus price target of $64.68, indicating a potential downside of 1.46%. Given Total System Services’ higher possible upside, research analysts clearly believe Total System Services is more favorable than IMS Health Holdings.

Valuation and Earnings

This table compares Total System Services and IMS Health Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Total System Services $4.69 billion 2.58 $941.94 million $2.05 32.02
IMS Health Holdings N/A N/A N/A $0.42 74.62

Total System Services has higher revenue and earnings than IMS Health Holdings. Total System Services is trading at a lower price-to-earnings ratio than IMS Health Holdings, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

76.1% of Total System Services shares are held by institutional investors. Comparatively, 90.3% of IMS Health Holdings shares are held by institutional investors. 2.6% of Total System Services shares are held by company insiders. Comparatively, 2.5% of IMS Health Holdings shares are held 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.

Summary

Total System Services beats IMS Health Holdings on 10 of the 12 factors compared between the two stocks.

Total System Services Company Profile

Total System Services, Inc. (TSYS) is a payment solutions provider that provides payment processing services, merchant services and related payment services to financial and non-financial institutions. The Company’s segments include North America Services, Merchant Services, NetSpend and International Services. In addition, it provides general purpose reloadable (GPR) prepaid and payroll cards, and alternative financial service solutions to the underbanked and other consumers. The Company’s Merchant Services segment provides third party processing services to merchant acquirers and Independent Sales Organizations (ISOs) and financial institutions. The Company’s NetSpend segment is engaged in the provision and sale of prepaid access devices, such as its GPR prepaid debit cards. The Company’s services and solutions include Issuing Services, Acquiring Services, Prepaid Solutions and Merchant Solutions.

IMS Health Holdings Company Profile

IMS Health Holdings, Inc. (IMS) is an information and technology services company that provides solutions to its clients in the healthcare industry. The Company has its presence in over 100 countries. The Company’s data set contains over 10 petabytes of data and over 500 million patient records. It serves healthcare organizations and life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The Company’s principal information offerings include national information offerings, sub-national information offerings and OneKey. Its technology services offerings include technology solutions, real-world evidence solutions, and workflow analytics and consulting services. It offers technology services that include data warehousing, information technology (IT) outsourcing, software applications and other services.

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