Analyzing Renren (RENN) and Fiserv (FISV)

Fiserv (NASDAQ: FISV) and Renren (NYSE:RENN) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Institutional and Insider Ownership

87.3% of Fiserv shares are owned by institutional investors. Comparatively, 2.5% of Renren shares are owned by institutional investors. 1.8% of Fiserv shares are owned by company insiders. Comparatively, 42.4% of Renren shares are owned 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 breakdown of current ratings and recommmendations for Fiserv and Renren, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fiserv 0 8 5 0 2.38
Renren 0 0 0 0 N/A

Fiserv presently has a consensus target price of $71.20, suggesting a potential downside of 0.79%. Given Fiserv’s higher probable upside, research analysts plainly believe Fiserv is more favorable than Renren.

Earnings and Valuation

This table compares Fiserv and Renren’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fiserv $5.70 billion 5.16 $1.25 billion $2.56 28.04
Renren $202.10 million 3.08 -$110.42 million ($1.61) -5.65

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

Volatility & Risk

Fiserv has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Renren has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Profitability

This table compares Fiserv and Renren’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fiserv 24.76% 44.13% 11.42%
Renren -54.64% -15.40% -9.44%

Summary

Fiserv beats Renren on 10 of the 12 factors compared between the two stocks.

About Fiserv

Fiserv, Inc., together with its subsidiaries, provides financial services technology worldwide. The company's Payments and Industry Products segment provides electronic bill payment and presentment services; mobile banking software and services; account-to-account transfers; person-to-person payment services; debit and credit card processing and services; payments infrastructure services; and other electronic payments software and services. This segment also offers card and print personalization services; investment account processing services for separately managed accounts; and fraud and risk management products and services. Its Financial Institution Services segment provides account processing services, source capture services, loan origination and servicing products, cash management and consulting services, and other products and services that support various types of financial transactions. This segment also offers a range of services, such as customization, business process outsourcing, training, consulting, and implementation services; and ACH and treasury management, and case management and resolution to the financial services industry. The company also provides document and payment card production and distribution, check processing and imaging, and lending products and services; and bank payment and liquidity management solutions, as well as Internet based mortgage software and mortgage lending technology solutions. It serves banks, savings banks, credit unions, investment management firms, leasing and finance companies, billers, retailers, merchants, and building societies. The company was founded in 1984 and is headquartered in Brookfield, Wisconsin.

About Renren

Renren Inc. operates a social networking Internet platform in the People's Republic of China. It operates through two segments, Renren and Internet Finance. The company operates Renren.com and Renren Mobile App that enable users to communicate and stay connected with friends, classmates, family members, and co-workers; and woxiu.com, a PC-based social video platform for users to stream their performances live to viewers. It also operates Renren Licai, a financing platform, as well as offers credit financing to used automobile dealers. The company was formerly known as Oak Pacific Interactive and changed its name to Renren Inc. in December 2010. Renren Inc. was founded in 2002 and is headquartered in Beijing, the People's Republic of China.

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