Critical Analysis: Evertec (NYSE:EVTC) vs. Data Storage (NYSE:DTST)

Evertec (NYSE:EVTC) and Data Storage (OTCMKTS:DTST) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent ratings and target prices for Evertec and Data Storage, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Evertec 0 0 3 0 3.00
Data Storage 0 0 0 0 N/A

Evertec presently has a consensus price target of $33.67, indicating a potential upside of 7.01%. Given Evertec’s higher probable upside, analysts clearly believe Evertec is more favorable than Data Storage.

Institutional & Insider Ownership

79.5% of Evertec shares are held by institutional investors. 0.6% of Evertec shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Evertec and Data Storage’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Evertec $453.87 million 4.99 $86.27 million $1.70 18.51
Data Storage $8.89 million 2.38 $260,000.00 N/A N/A

Evertec has higher revenue and earnings than Data Storage.

Dividends

Evertec pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Data Storage does not pay a dividend. Evertec pays out 11.8% of its earnings in the form of a dividend.

Volatility & Risk

Evertec has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Data Storage has a beta of 2.36, suggesting that its stock price is 136% more volatile than the S&P 500.

Profitability

This table compares Evertec and Data Storage’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Evertec 20.55% 60.49% 14.03%
Data Storage 4.26% 19.53% 5.06%

Summary

Evertec beats Data Storage on 11 of the 13 factors compared between the two stocks.

Evertec Company Profile

EVERTEC, Inc. engage in transaction processing business serving financial institutions, merchants, corporations, and government agencies in Latin America and the Caribbean. The company operates in four segments: Payment Services – Puerto Rico & Caribbean; Payment Services – Latin America; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. The company also offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers; and EBT services. In addition, it provides business process management solutions comprising core bank processing, network hosting and management, IT consulting services, business process outsourcing, item and cash processing, and fulfillment solutions to financial institutions, and corporate and government customers. The company manages a system of electronic payment networks that process approximately two billion transactions. It sells and distributes its services primarily through a proprietary direct sales force. The company was formerly known as Carib Latam Holdings, Inc. EVERTEC, Inc. was founded in 1988 and is based in San Juan, Puerto Rico.

Data Storage Company Profile

Data Storage Corporation provides disaster recovery, business continuity, cloud storage, and cloud computing solutions and services primarily in the United States. The company's solutions assist organizations in protecting their data, minimize downtime, and ensure regulatory compliance. Its solutions include infrastructure-as-a-service, data backup, recovery and restore, and data replication services; email archival and compliance; eDiscovery; continuous data protection; data de-duplication; and virtualized system recovery, as well as hybrid cloud services. The company offers its solutions and services to businesses in healthcare, banking and finance, distribution services, manufacturing, construction, education, and government sectors. Data Storage Corporation is headquartered in Melville, New York.

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