Critical Review: NetSpend (NTSP) & CPI Card Group (PMTS)
NetSpend (NASDAQ: NTSP) and CPI Card Group (NASDAQ:PMTS) are both financials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.
CPI Card Group pays an annual dividend of $0.14 per share and has a dividend yield of 16.1%. NetSpend does not pay a dividend. CPI Card Group pays out -70.0% of its earnings in the form of a dividend.
This is a summary of current ratings and price targets for NetSpend and CPI Card Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CPI Card Group||1||3||0||0||1.75|
CPI Card Group has a consensus target price of $1.30, suggesting a potential upside of 49.43%.
Insider and Institutional Ownership
11.5% of CPI Card Group shares are owned by institutional investors. 5.0% of CPI Card Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares NetSpend and CPI Card Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CPI Card Group||-4.44%||-1.51%||-1.21%|
Valuation & Earnings
This table compares NetSpend and CPI Card Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|CPI Card Group||$308.70 million||0.16||$5.39 million||($0.20)||-4.35|
CPI Card Group has higher revenue and earnings than NetSpend. CPI Card Group is trading at a lower price-to-earnings ratio than NetSpend, indicating that it is currently the more affordable of the two stocks.
CPI Card Group beats NetSpend on 5 of the 9 factors compared between the two stocks.
NetSpend Company Profile
NetSpend Holdings, Inc. (NetSpend) is a provider of general-purpose reloadable prepaid debit cards (GPR) cards, and related alternative financial services to underbanked consumers in the United States. NetSpend’s GPR cards are tied to the Federal Deposit Insurance Corporation (FDIC)-insured depository accounts and can be used to make purchase transactions at any merchant that participates in the MasterCard, Visa or PULSE networks and to withdraw funds at participating automated teller machines (ATMs). The Company also offers to its cardholders direct deposit, interest-bearing savings accounts, bill pay and card-to-card transfer functionality, personal financial management tools and online and mobile phone card account access. As of December 31, 2010, the Company marketed its GPR cards through approximately 750 retail distributors at approximately 39,000 locations. As of August 21, 2010, the Company ceased marketing gift cards.
CPI Card Group Company Profile
CPI Card Group Inc., formerly CPI Holdings I, Inc., provides Financial Payment Card solutions in North America. The Company is engaged in the design, production, data personalization, packaging and fulfillment of Financial Payment Cards, which it defines as credit cards, debit cards and prepaid debit cards issued on the networks of the Payment Card Brands in the United States, Europe and Canada. It is also engaged in the design, production, data personalization, packaging and fulfillment of retail gift and loyalty cards. Its segments include U.S. Debit and Credit, which produces Financial Payment Cards and provides integrated card services to card-issuing banks in the United States; U.S. Prepaid Debit, which provides integrated card services to Prepaid Debit Card issuers in the United States; U.K. Limited, which produces retail cards for customers in the United Kingdom and continental Europe, and Other, which has operations in Ontario, Canada and Petersfield, United Kingdom.
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