Financial Comparison: Visa (NYSE:V) and Usio (NASDAQ:USIO)

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

Risk and Volatility

Usio has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, Visa has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Usio	-0.46%	-2.05%	-0.37%
Visa	50.15%	60.31%	23.46%

Earnings and Valuation

This table compares Usio and Visa”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Usio	$82.93 million	0.49	$3.31 million	($0.02)	-74.75
Visa	$40.00 billion	15.52	$20.06 billion	$10.21	33.37

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

Institutional & Insider Ownership

20.2% of Usio shares are held by institutional investors. Comparatively, 82.2% of Visa shares are held by institutional investors. 17.8% of Usio shares are held by insiders. Comparatively, 0.1% of Visa shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Usio and Visa, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Usio	2	0	1	0	1.67
Visa	0	4	19	5	3.04

Usio currently has a consensus target price of $4.00, indicating a potential upside of 167.56%. Visa has a consensus target price of $400.35, indicating a potential upside of 17.51%. Given Usio’s higher possible upside, equities research analysts plainly believe Usio is more favorable than Visa.

Summary

Visa beats Usio on 12 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 Visa

Visa Inc. operates as a payment technology company in the United States and internationally. The company operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions. It also offers credit, debit, and prepaid card products; tap to pay, tokenization, and click to pay services; Visa Direct, a solution that facilitates the delivery of funds to eligible cards, deposit accounts, and digital wallets; Visa B2B Connect, a multilateral business-to-business cross-border payments network; Visa Cross-Border Solution, a cross-border consumer payments solution; and Visa DPS that provides a range of value-added services, including fraud mitigation, dispute management, data analytics, campaign management, a suite of digital solutions, and contact center services. The company also provides acceptance solutions, which include Cybersource that provides modular and value-added services for connecting merchants to payment processing; risk and identity solutions, such as Visa Advanced Authorization, Visa Secure, Visa Risk and Decision Manager, Visa Consumer Authentication Service, and payment-decisioning solutions for fraud prevention; and Visa Consulting and Analytics, a payment consulting advisory services. It provides its services under the Visa, Visa Electron, Interlink, V PAY, and PLUS brand names. The company serves merchants, financial institutions, and government entities. Visa Inc. was founded in 1958 and is headquartered in San Francisco, California.