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

Insider & Institutional Ownership

91.1% of Global Payments shares are held by institutional investors. 0.9% of Global Payments shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Global Payments and Xoom Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Global Payments 7.14% 18.50% 5.40%
Xoom Corp -37.74% -25.16% -21.82%

Dividends

Global Payments pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Xoom Corp does not pay a dividend. Global Payments pays out 2.2% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations for Global Payments and Xoom Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Global Payments 2 3 23 0 2.75
Xoom Corp 0 0 0 0 N/A

Global Payments presently has a consensus price target of $104.83, indicating a potential upside of 4.80%.

Earnings & Valuation

This table compares Global Payments and Xoom Corp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Global Payments $2.90 billion 5.49 $271.66 million $1.79 55.88
Xoom Corp N/A N/A N/A ($1.19) N/A

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

Summary

Global Payments beats Xoom Corp on 9 of the 10 factors compared between the two stocks.

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.

About Xoom Corp

Xoom Corporation (Xoom) is engaged in the digital consumer-to-consumer international money transfer business. The Company offers money transfer services from the United States to around 32 countries and its cross-border bill payment services from the United States to approximately five countries. Xoom’s solutions offer its customers a way to send money to, and pay bills for family and friends from any Internet-enabled location. The Company’s operating platform provides various solutions for transferring funds internationally, such as origination, funding, disbursement and transaction processing. The Company’s technology platform includes a customer interface which enables customers to send transactions from its Website, mobile Website or mobile application, using a computer, a tablet or a mobile phone; a risk management system; a transaction processing platform, and a disbursement integration platform. The Company provides its services under the XOOM brand.

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