Usio (NASDAQ:USIO) and MGIC Investment (NYSE:MTG) Critical Comparison

Usio (NASDAQ:USIO) and MGIC Investment (NYSE:MTG) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Valuation and Earnings

This table compares Usio and MGIC Investment”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Usio	$85.39 million	0.79	-$2.51 million	($0.06)	-39.50
MGIC Investment	$1.21 billion	5.02	$738.35 million	$3.20	9.28

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

Insider & Institutional Ownership

20.2% of Usio shares are held by institutional investors. Comparatively, 95.6% of MGIC Investment shares are held by institutional investors. 19.0% of Usio shares are held by company insiders. Comparatively, 1.3% of MGIC Investment shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Usio and MGIC Investment, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Usio	1	1	2	0	2.25
MGIC Investment	0	4	1	2	2.71

Usio currently has a consensus price target of $5.38, suggesting a potential upside of 126.79%. MGIC Investment has a consensus price target of $30.60, suggesting a potential upside of 3.05%. Given Usio’s higher possible upside, equities research analysts clearly believe Usio is more favorable than MGIC Investment.

Volatility and Risk

Usio has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, MGIC Investment has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Usio and MGIC Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Usio	-1.63%	-8.20%	-1.26%
MGIC Investment	59.20%	13.90%	10.81%

Summary

MGIC Investment beats Usio on 11 of the 15 factors compared between the two stocks.

About Usio

Usio, Inc., together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States. The company offers various types of automated clearing house (ACH) processing; and credit, prepaid card, and debit card-based processing services. Its ACH transaction processing services include Represented Check and Check Conversion for electronic payment facilitation. In addition, the company offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a website or retail services accessed through a physical terminal. Further, it provides a proprietary web-based customer service application that allows companies to process one-time and recurring payments through e-checks or credit cards; and an interactive voice response telephone system to companies, which accept payments directly from consumers over the telephone using e-checks or credit cards. Additionally, the company offers prepaid and incentive card issuance services; and operates a prepaid core processing platform, as well as provides additional services, such as electronic bill presentment, document composition, document decomposition, and printing and mailing services for various industry verticals, including utilities and financial institutions. It markets and sells ACH products and services primarily through resellers; and prepaid card program directly to government entities, corporations, and to consumers through the internet. The company was formerly known as Payment Data Systems, Inc. and changed its name to Usio, Inc. in June 2019. Usio, Inc. was incorporated in 1998 and is headquartered in San Antonio, Texas.

About MGIC Investment

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, the District of Columbia, Puerto Rico, and Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides pool insurance for secondary market mortgage transactions; and contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.