PennyMac Financial Services (NYSE:PFSI) & Paymentus (NYSE:PAY) Head-To-Head Survey

PennyMac Financial Services (NYSE:PFSI) and Paymentus (NYSE:PAY) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Insider and Institutional Ownership

57.9% of PennyMac Financial Services shares are owned by institutional investors. Comparatively, 78.4% of Paymentus shares are owned by institutional investors. 15.2% of PennyMac Financial Services shares are owned by company insiders. Comparatively, 55.7% of Paymentus shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

PennyMac Financial Services has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500. Comparatively, Paymentus has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for PennyMac Financial Services and Paymentus, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PennyMac Financial Services	2	4	4	0	2.20
Paymentus	0	5	1	2	2.62

PennyMac Financial Services currently has a consensus price target of $103.12, suggesting a potential upside of 65.02%. Paymentus has a consensus price target of $38.67, suggesting a potential upside of 20.34%. Given PennyMac Financial Services’ higher probable upside, equities analysts plainly believe PennyMac Financial Services is more favorable than Paymentus.

Profitability

This table compares PennyMac Financial Services and Paymentus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PennyMac Financial Services	17.74%	11.18%	1.65%
Paymentus	6.24%	15.26%	12.80%

Valuation & Earnings

This table compares PennyMac Financial Services and Paymentus”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PennyMac Financial Services	$2.05 billion	1.59	$501.08 million	$7.28	8.58
Paymentus	$1.36 billion	2.97	$66.94 million	$0.66	48.68

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

Summary

Paymentus beats PennyMac Financial Services on 8 of the 15 factors compared between the two stocks.

About PennyMac Financial Services

PennyMac Financial Services, Inc., through its subsidiaries, engages in the mortgage banking and investment management activities in the United States. The company operates through three segments: Production, Servicing, and Investment Management. The Production segment is involved in the origination, acquisition, and sale of loans. This segment sources residential conventional and government-insured or guaranteed mortgage loans through correspondent production, consumer direct lending, and broker direct lending. The Servicing segment performs loan servicing for both newly originated loans that are under holding for sale and loans services for others. The segment performs loan administration, collection, and default management activities, including the collection and remittance of loan payments; responds to customer inquiries; provides accounting for principal and interest; holds custodial funds for the payment of property taxes and insurance premiums; counsels delinquent borrowers; and supervising foreclosures and property dispositions, as well as administers loss mitigation activities, such as modification and forbearance programs. The Investment Management segment is involved in sourcing, performing diligence, bidding, and closing investment asset acquisitions; managing correspondent production activities for PennyMac Mortgage Investment Trust; and managing acquired assets. The company was founded in 2008 and is headquartered in Westlake Village, California.

About Paymentus

Paymentus Holdings, Inc. provides cloud-based bill payment technology and solutions in the United States and internationally. The company offers electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management to billers through a software-as-a-service technology platform. Its platform's payment processing includes credit cards, debit cards, eChecks, and digital wallets. It serves utility, financial service, government, insurance, telecommunication, real estate management, education, consumer finance, healthcare, and small business industries. The company was founded in 2004 and is headquartered in Charlotte, North Carolina.