Contrasting Usio (NASDAQ:USIO) & Finance of America Companies (NYSE:FOA)

Finance of America Companies (NYSE:FOA) and Usio (NASDAQ:USIO) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Profitability

This table compares Finance of America Companies and Usio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Finance of America Companies	-0.10%	28.39%	0.35%
Usio	-1.63%	-8.20%	-1.26%

Analyst Recommendations

This is a summary of current recommendations and price targets for Finance of America Companies and Usio, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Finance of America Companies	2	1	2	0	2.00
Usio	1	1	2	0	2.25

Finance of America Companies currently has a consensus price target of $30.50, suggesting a potential upside of 88.91%. Usio has a consensus price target of $5.38, suggesting a potential upside of 109.14%. Given Usio’s stronger consensus rating and higher possible upside, analysts clearly believe Usio is more favorable than Finance of America Companies.

Institutional and Insider Ownership

97.2% of Finance of America Companies shares are owned by institutional investors. Comparatively, 20.2% of Usio shares are owned by institutional investors. 35.4% of Finance of America Companies shares are owned by insiders. Comparatively, 19.0% of Usio shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Finance of America Companies has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, Usio has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.

Valuation and Earnings

This table compares Finance of America Companies and Usio”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Finance of America Companies	$497.43 million	0.56	$45.24 million	($3.01)	-5.36
Usio	$85.39 million	0.86	-$2.51 million	($0.06)	-42.83

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

Summary

Finance of America Companies beats Usio on 9 of the 13 factors compared between the two stocks.

About Finance of America Companies

Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.

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.