Analyzing Total System Services (TSS) and The Competition

Total System Services (NYSE: TSS) is one of 187 public companies in the “IT Services & Consulting” industry, but how does it contrast to its peers? We will compare Total System Services to similar companies based on the strength of its earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Risk and Volatility

Total System Services has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Total System Services’ peers have a beta of 1.10, indicating that their average share price is 10% more volatile than the S&P 500.

Earnings & Valuation

This table compares Total System Services and its peers gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Total System Services $4.17 billion $319.63 million 32.90
Total System Services Competitors $2.79 billion $290.25 million 290.17

Total System Services has higher revenue and earnings than its peers. Total System Services is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Total System Services and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Total System Services 8.73% 26.25% 9.23%
Total System Services Competitors -20.07% -271.26% -4.55%

Insider and Institutional Ownership

75.2% of Total System Services shares are owned by institutional investors. Comparatively, 62.6% of shares of all “IT Services & Consulting” companies are owned by institutional investors. 2.6% of Total System Services shares are owned by insiders. Comparatively, 15.9% of shares of all “IT Services & Consulting” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Total System Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.7%. Total System Services pays out 23.1% of its earnings in the form of a dividend. As a group, “IT Services & Consulting” companies pay a dividend yield of 1.6% and pay out 39.4% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Total System Services and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Total System Services 1 9 16 0 2.58
Total System Services Competitors 724 4642 7399 167 2.54

Total System Services presently has a consensus target price of $69.17, suggesting a potential downside of 6.56%. As a group, “IT Services & Consulting” companies have a potential upside of 2.90%. Given Total System Services’ peers higher possible upside, analysts plainly believe Total System Services has less favorable growth aspects than its peers.

Summary

Total System Services beats its peers on 10 of the 15 factors compared.

About Total System Services

Total System Services, Inc. (TSYS) is a payment solutions provider that provides payment processing services, merchant services and related payment services to financial and non-financial institutions. The Company’s segments include North America Services, Merchant Services, NetSpend and International Services. In addition, it provides general purpose reloadable (GPR) prepaid and payroll cards, and alternative financial service solutions to the underbanked and other consumers. The Company’s Merchant Services segment provides third party processing services to merchant acquirers and Independent Sales Organizations (ISOs) and financial institutions. The Company’s NetSpend segment is engaged in the provision and sale of prepaid access devices, such as its GPR prepaid debit cards. The Company’s services and solutions include Issuing Services, Acquiring Services, Prepaid Solutions and Merchant Solutions.

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