Fiserv (NYSE: CSLT) and Castlight Health (NYSE:CSLT) are both business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Insider & Institutional Ownership

89.2% of Fiserv shares are held by institutional investors. Comparatively, 44.1% of Castlight Health shares are held by institutional investors. 1.7% of Fiserv shares are held by insiders. Comparatively, 22.6% of Castlight Health shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Fiserv has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Castlight Health has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Fiserv and Castlight Health, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fiserv 1 10 4 0 2.20
Castlight Health 0 1 4 0 2.80

Fiserv presently has a consensus target price of $75.32, indicating a potential downside of 5.18%. Castlight Health has a consensus target price of $5.70, indicating a potential upside of 83.87%. Given Castlight Health’s stronger consensus rating and higher probable upside, analysts plainly believe Castlight Health is more favorable than Fiserv.

Profitability

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

Net Margins Return on Equity Return on Assets
Fiserv 25.14% 44.25% 11.80%
Castlight Health -38.02% -22.89% -16.51%

Valuation & Earnings

This table compares Fiserv and Castlight Health’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fiserv $5.70 billion 5.65 $1.25 billion $2.56 31.03
Castlight Health $131.43 million 3.25 -$55.57 million ($0.26) -11.92

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

Summary

Fiserv beats Castlight Health on 9 of the 13 factors compared between the two stocks.

Fiserv Company Profile

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.

Castlight Health Company Profile

Castlight Health, Inc. provides a software-as-a-service platform used for health benefits navigation for employees in the United States. Its platform matches employees to the resources their employers make available to them; managing a condition; and assists them to manage their benefits. The company also offers communication and testing, implementation, and user customer support services. It serves customers in a range of industries, including education, manufacturing, retail, technology, and government. The company was formerly known as Ventana Health Services and changed its name to Castlight Health, Inc. in April 2010. Castlight Health, Inc. was founded in 2008 and is headquartered in San Francisco, California.

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