Shift4 Payments (NYSE:FOUR – Get Rating) and Steel Connect (NASDAQ:STCN – Get Rating) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.
Volatility and Risk
Shift4 Payments has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Steel Connect has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500.
Earnings & Valuation
This table compares Shift4 Payments and Steel Connect’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Shift4 Payments | $1.99 billion | 2.72 | $75.10 million | $1.08 | 60.68 |
| Steel Connect | $203.27 million | 0.29 | -$10.97 million | $0.55 | 1.76 |
Profitability
This table compares Shift4 Payments and Steel Connect’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Shift4 Payments | 3.77% | 14.06% | 2.28% |
| Steel Connect | 17.38% | N/A | -1.63% |
Institutional & Insider Ownership
66.9% of Shift4 Payments shares are owned by institutional investors. Comparatively, 47.2% of Steel Connect shares are owned by institutional investors. 36.6% of Shift4 Payments shares are owned by insiders. Comparatively, 11.0% of Steel Connect shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of current recommendations and price targets for Shift4 Payments and Steel Connect, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Shift4 Payments | 1 | 0 | 10 | 0 | 2.82 |
| Steel Connect | 0 | 0 | 0 | 0 | N/A |
Shift4 Payments presently has a consensus price target of $74.92, indicating a potential upside of 14.33%. Given Shift4 Payments’ higher probable upside, analysts clearly believe Shift4 Payments is more favorable than Steel Connect.
Summary
Shift4 Payments beats Steel Connect on 12 of the 13 factors compared between the two stocks.
About Shift4 Payments
Shift4 Payments, Inc. (NYSE FOUR) provides integrated payment processing and technology solutions in the United States. Its payments platform provides omni-channel card acceptance and processing solutions, including end-to-end payment processing for various payment types; merchant acquiring; proprietary omni-channel gateway; complementary software integrations; integrated and mobile point-of-sale (POS) solutions; security and risk management solutions; and reporting and analytical tools, as well as tokenization, risk management/underwriting, payment device and chargeback management, fraud prevention, and gift card solutions. The company also offers suite of technology solutions, such as Lighthouse, a cloud-based business intelligence tool that includes customer engagement, social media management, online reputation management, scheduling, and product pricing, as well as reporting and analytics; integrated POS for merchants business; and Skytab, a mobile payment solution. In addition, it provides marketplace technology that enable seamless integrations into third-party applications, which includes online delivery services, payroll, timekeeping, and other human resource services. Further, the company offers merchant management, training and education, marketing management, and incentives tracking solutions. Additionally, it provides merchant underwriting, onboarding and activation, training, risk management, and support services; and software integrations and compliance management, and partner support and services. The company was founded in 1998 and is headquartered in Allentown, Pennsylvania.
About Steel Connect
Steel Connect, Inc. is a holding company, which engages in the provision of an end-to-end global supply chain solutions and e-commerce services. Its product aims to improve their clients’ global supply chain, speed to market, product customization, flexibility, cost, quality and service. The company was founded in 1986 and is headquartered in Smyrna, TN.
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