Net 1 UEPS Technologies (NASDAQ: UEPS) and Payment Data Systems (NASDAQ:PYDS) are both small-cap industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.

Volatility & Risk

Net 1 UEPS Technologies has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, Payment Data Systems has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Profitability

This table compares Net 1 UEPS Technologies and Payment Data Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Net 1 UEPS Technologies 7.01% 15.79% 8.61%
Payment Data Systems -21.43% -29.43% -5.18%

Analyst Recommendations

This is a summary of recent recommendations for Net 1 UEPS Technologies and Payment Data Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Net 1 UEPS Technologies 0 0 2 0 3.00
Payment Data Systems 0 0 1 0 3.00

Net 1 UEPS Technologies presently has a consensus price target of $15.00, indicating a potential upside of 49.70%. Payment Data Systems has a consensus price target of $4.00, indicating a potential upside of 135.29%. Given Payment Data Systems’ higher probable upside, analysts plainly believe Payment Data Systems is more favorable than Net 1 UEPS Technologies.

Earnings & Valuation

This table compares Net 1 UEPS Technologies and Payment Data Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Net 1 UEPS Technologies $610.07 million 0.93 $72.95 million $1.69 5.93
Payment Data Systems $14.57 million 1.85 -$3.00 million N/A N/A

Net 1 UEPS Technologies has higher revenue and earnings than Payment Data Systems.

Institutional and Insider Ownership

56.2% of Net 1 UEPS Technologies shares are held by institutional investors. Comparatively, 1.1% of Payment Data Systems shares are held by institutional investors. 3.2% of Net 1 UEPS Technologies shares are held by insiders. Comparatively, 46.6% of Payment Data Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Net 1 UEPS Technologies beats Payment Data Systems on 7 of the 11 factors compared between the two stocks.

About Net 1 UEPS Technologies

Net 1 UEPS Technologies, Inc. provides payment solutions, transaction processing services, and financial technologies to various industries in South Africa, South Korea, and internationally. The company develops and markets transaction processing solutions that comprise its smart card-based alternative payment system for the unbanked and under-banked populations of developing economies, and for mobile transaction channels. It operates through three segments: South African Transaction Processing, International Transaction Processing, and Financial Inclusion and Applied Technologies. The South African Transaction Processing segment provides welfare benefit distribution services to the South African government and transaction processing for retailers, utilities, and banks. The International Transaction Processing segment offers payment processing services to merchants and card issuers through its value-added network. The Financial Inclusion and Applied Technologies segment provides short-term loans; and smart card accounts. This segment also sells prepaid products comprising electricity and airtime, as well as hardware and software products; and offers life insurance products. Net 1 UEPS Technologies, Inc. was founded in 1989 and is headquartered in Johannesburg, South Africa.

About Payment Data Systems

Payment Data Systems, 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 processing services include Represented Check, a consumer non-sufficient funds check that is represented for payment electronically rather than through the paper check collection system; and Accounts Receivable Check Conversion, a consumer paper check payment, which is converted into an e-check. The company also 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. In addition, 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. Further, the company creates, manages, and processes prepaid card programs for corporate clients to issue prepaid cards to their customer base or employees; and issues general purpose reloadable cards to consumers as an alternative to a traditional bank account. Additionally, it operates billx.com, a consumer Website that allows consumers to process online payments to pay other individual; and provides prepaid cards to consumers for use in as a tool to stay on budget, manage allowances, and share money with family and friends. The company markets and sells its products and services directly, as well as through non-exclusive resellers. Payment Data Systems, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

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