Reviewing Alibaba Group (NYSE:BABA) and Total System Services (NYSE:TSS)
Alibaba Group (NYSE:BABA) and Total System Services (NYSE:TSS) are both large-cap retail/wholesale companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.
Insider and Institutional Ownership
43.5% of Alibaba Group shares are owned by institutional investors. Comparatively, 78.3% of Total System Services shares are owned by institutional investors. 12.5% of Alibaba Group shares are owned by insiders. Comparatively, 2.0% of Total System Services 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.
This table compares Alibaba Group and Total System Services’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Alibaba Group||$56.15 billion||8.48||$13.10 billion||$3.59||52.13|
|Total System Services||$4.03 billion||5.86||$576.66 million||$4.26||31.28|
Alibaba Group has higher revenue and earnings than Total System Services. Total System Services is trading at a lower price-to-earnings ratio than Alibaba Group, indicating that it is currently the more affordable of the two stocks.
This table compares Alibaba Group and Total System Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Total System Services||15.03%||32.26%||10.68%|
Total System Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.4%. Alibaba Group does not pay a dividend. Total System Services pays out 12.2% of its earnings in the form of a dividend.
Volatility and Risk
Alibaba Group has a beta of 2.26, indicating that its share price is 126% more volatile than the S&P 500. Comparatively, Total System Services has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.
This is a summary of recent recommendations for Alibaba Group and Total System Services, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Total System Services||0||5||6||0||2.55|
Alibaba Group currently has a consensus target price of $225.78, suggesting a potential upside of 20.64%. Total System Services has a consensus target price of $123.29, suggesting a potential downside of 7.49%. Given Alibaba Group’s stronger consensus rating and higher possible upside, research analysts plainly believe Alibaba Group is more favorable than Total System Services.
Alibaba Group beats Total System Services on 11 of the 16 factors compared between the two stocks.
Alibaba Group Company Profile
Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao Marketplace, a mobile commerce destination; Tmall, a third-party platform for brands and retailers; Rural Taobao program that enables rural residents and businesses to sell agricultural products to urban consumers; 1688.com, an online wholesale marketplace; Alibaba.com, an online wholesale marketplace; AliExpress, a retail marketplace; Lazada, an e-commerce platform; and Lingshoutong, a digital sourcing platform. The company also provides pay-for-performance and display marketing services; and Taobao Ad Network and Exchange, a real-time bidding online marketing exchange in China; and digital payment and financial technology platform services. In addition, it offers cloud computing services, including elastic computing, database, storage, virtualization network, large scale computing, security, and management and application services, big data analytics, a machine learning platform, and Internet of Things and other service for enterprises; and payment and escrow services; and movies, TV drama series, online dramas, variety shows, news feeds, games, literature and music, and other areas through various content platforms, as well as develops and operates mobile browsers. Further, the company provides AutoNavi, a mobile digital map, navigation, and real-time traffic information; DingTalk, a proprietary enterprise communication and collaboration platform; and Tmall Genie, an AI-powered voice assistant, which helps consumers to shop, order local services, search for information, control smart appliances, and play interactive content. The company was founded in 1999 and is based in Hangzhou, the People's Republic of China.
Total System Services Company Profile
Total System Services, Inc. provides payment processing, merchant, and related payment services to financial and nonfinancial institutions worldwide. The company operates through three segments: Issuer Solutions, Merchant Solutions, and Consumer Solutions. It offers general purpose reloadable prepaid and payroll cards, demand deposit accounts, and other financial service solutions to the underbanked and other consumers and businesses. The company also provides third party processing and related services for credit card issuers, merchant acquirers, independent sales organizations, and financial institutions; and issuer processing services, as well as operates as a prepaid program manager. Total System Services, Inc. was founded in 1982 and is headquartered in Columbus, Georgia.
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