Contrasting ExlService (EXLS) & Total System Services (TSS)

ExlService (NASDAQ:EXLS) and Total System Services (NYSE:TSS) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, dividends, earnings and profitability.

Valuation & Earnings

This table compares ExlService and Total System Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ExlService $762.31 million 2.42 $48.88 million $2.52 21.38
Total System Services $4.93 billion 3.09 $586.18 million $3.22 25.93

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

Profitability

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

Net Margins Return on Equity Return on Assets
ExlService 5.14% 13.96% 9.54%
Total System Services 15.93% 30.28% 10.28%

Analyst Ratings

This is a breakdown of recent ratings for ExlService and Total System Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ExlService 0 2 5 0 2.71
Total System Services 0 5 12 0 2.71

ExlService currently has a consensus price target of $64.00, suggesting a potential upside of 18.80%. Total System Services has a consensus price target of $97.13, suggesting a potential upside of 16.34%. Given ExlService’s stronger consensus rating and higher possible upside, analysts plainly believe ExlService is more favorable than Total System Services.

Insider & Institutional Ownership

93.2% of ExlService shares are held by institutional investors. Comparatively, 76.8% of Total System Services shares are held by institutional investors. 4.4% of ExlService shares are held by insiders. Comparatively, 2.4% of Total System Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Total System Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. ExlService does not pay a dividend. Total System Services pays out 16.1% of its earnings in the form of a dividend. Total System Services has increased its dividend for 2 consecutive years.

Volatility & Risk

ExlService has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Total System Services has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Summary

Total System Services beats ExlService on 11 of the 17 factors compared between the two stocks.

ExlService Company Profile

ExlService Holdings, Inc. provides operations management and analytics services in the United States, the United Kingdom, and internationally. The company offers business process management (BPM) services to the insurance industry in the areas of claims processing, subrogation, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business processing, policy servicing, premium audit, surveys, billing and collection, commercial and residential survey, and customer services. It also provides BPM services related to the care management and population health, multi-chronic case management, dual eligible special needs plans, payment integrity, revenue optimization, and customer engagement for the healthcare industry; BPM services related to business processes in corporate and leisure travel, such as reservations, customer service, fulfillment, and finance and accounting; and finance and accounting BPM services, including procure-to-pay, order-to-cash, hire-to-retire, record-to-report, regulatory reporting, financial planning and analysis, audit and assurance, and treasury and tax processes. In addition, the company offers BPM services for banking and financial services industry comprising residential mortgage lending, retail banking and credit cards, commercial banking, and investment management; BPM services related to enhancing operating models, improving customer experience, reducing costs, shortening turnaround time, and simplifying compliance for clients; and industry-specific digital transformational services. Further, it provides predictive and prescriptive analytics in the areas of customer acquisition and lifecycle management, risk underwriting and pricing, operational effectiveness, credit and operational risk monitoring and governance, regulatory reporting, and data management. The company was founded in 1999 and is headquartered in New York, New York.

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: Merchant Solutions, Issuer Solutions, and Netspend. 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 1983 and is headquartered in Columbus, Georgia.

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