Contrasting Heartland Payment Systems (HPY) & Western Union Company (The) (WU)

Western Union Company (The) (NYSE: WU) and Heartland Payment Systems (NYSE:HPY) are both business services companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.

Profitability

This table compares Western Union Company (The) and Heartland Payment Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Western Union Company (The) 3.50% 92.41% 9.04%
Heartland Payment Systems 3.25% 27.90% 6.09%

Valuation & Earnings

This table compares Western Union Company (The) and Heartland Payment Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Western Union Company (The) $5.43 billion 1.64 $1.35 billion $0.39 48.46
Heartland Payment Systems N/A N/A N/A N/A N/A

Western Union Company (The) has higher revenue and earnings than Heartland Payment Systems.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Western Union Company (The) and Heartland Payment Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western Union Company (The) 4 6 1 0 1.73
Heartland Payment Systems 0 0 0 0 N/A

Western Union Company (The) presently has a consensus target price of $20.20, indicating a potential upside of 6.88%. Given Western Union Company (The)’s higher possible upside, equities analysts clearly believe Western Union Company (The) is more favorable than Heartland Payment Systems.

Dividends

Western Union Company (The) pays an annual dividend of $0.70 per share and has a dividend yield of 3.7%. Heartland Payment Systems does not pay a dividend. Western Union Company (The) pays out 179.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Western Union Company (The) has raised its dividend for 2 consecutive years and Heartland Payment Systems has raised its dividend for 6 consecutive years.

Summary

Western Union Company (The) beats Heartland Payment Systems on 7 of the 9 factors compared between the two stocks.

Western Union Company (The) Company Profile

The Western Union Company (Western Union) is a provider of money movement and payment services. The Company operates through three segments: Consumer-to-Consumer, Consumer-to-Business and Business Solutions. The Company’s Consumer-to-Consumer segment facilitates money transfers between two consumers, primarily through a network of third-party agents. The Company’s Consumer-to-Business segment provides options to make one-time or recurring payments from consumers to businesses and other organizations, including utilities, auto finance companies, mortgage servicers, financial service providers and government agencies. Its Consumer-to-Business payments services are available through a range of services that include Speedpay, Pago Facil and Western Union Payments. Western Union’s Business Solutions segment facilitates payment and foreign exchange solutions, primarily cross-border, cross-currency transactions, for small and medium size enterprises and other organizations and individuals.

Heartland Payment Systems Company Profile

Heartland Payment Systems, Inc. is a United States-based company that provides payment processing services to merchants. The Company’s electronic payment processing services facilitate the exchange of information and funds between merchants and cardholders’ financial institutions. Its segments include Payment Processing, which offers card payment processing and related services to its small and medium-sized enterprise merchants and Network Services merchants; Campus Solutions, which offers payment processing, integrated commerce solutions, loan services and open- and closed-loop payment solutions to institutions of higher education; Heartland School Solutions, which offers school nutrition and point of sale solutions and associated payment solutions to K-12 schools; Heartland Payroll Solutions, which provides payroll processing and related tax filing services, and Other, including integrated payments solutions for small ticket merchants, and loyalty and gift card marketing solutions.

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