Analyzing Green Dot (NYSE:GDOT) & Mastercard (NYSE:MA)

Green Dot (NYSE:GDOT) and Mastercard (NYSE:MA) are both business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider and Institutional Ownership

92.6% of Green Dot shares are held by institutional investors. Comparatively, 97.3% of Mastercard shares are held by institutional investors. 1.4% of Green Dot shares are held by company insiders. Comparatively, 0.1% of Mastercard shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Green Dot and Mastercard, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Green Dot	1	1	2	2	2.83
Mastercard	0	2	24	2	3.00

Green Dot presently has a consensus target price of $13.00, suggesting a potential downside of 0.95%. Mastercard has a consensus target price of $630.89, suggesting a potential upside of 9.20%. Given Mastercard’s stronger consensus rating and higher probable upside, analysts clearly believe Mastercard is more favorable than Green Dot.

Valuation and Earnings

This table compares Green Dot and Mastercard”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Green Dot	$1.93 billion	0.38	-$26.70 million	($0.44)	-29.83
Mastercard	$28.17 billion	18.54	$12.87 billion	$14.83	38.96

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

Risk and Volatility

Green Dot has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Mastercard has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Profitability

This table compares Green Dot and Mastercard’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Green Dot	-1.24%	9.93%	1.66%
Mastercard	44.93%	200.01%	29.26%

Summary

Mastercard beats Green Dot on 13 of the 14 factors compared between the two stocks.

About Green Dot

Green Dot Corporation, a financial technology and registered bank holding company, provides various financial services to consumers and businesses in the United States. It operates through three segments: Consumer Services, Business to Business Services, and Money Movement Services. The company provides deposit account programs, including consumer and small business checking account products, network-branded reloadable prepaid debit cards and gift cards, and secured credit programs. It offers money processing services, such as cash transfer services that enable consumers to deposit or pick up cash and pay bills with cash at the point-of-sale at any participating retailer; and simply paid disbursement services, which enable wages and authorized funds disbursement to its deposit account programs and accounts issued by any third-party bank or program manager. In addition, the company offers tax processing services comprising tax refund transfers, which provide the processing technology to facilitate receipt of a taxpayers' refund proceeds; small business lending to independent tax preparation providers that seek small advances; and fast cash advance, a loan that enables tax refund recipients. Green Dot Corporation was incorporated in 1999 and is headquartered in Austin, Texas.

About Mastercard

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The company offers integrated products and value-added services for account holders, merchants, financial institutions, digital partners, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid programs services; and commercial credit, debit, and prepaid payment products and solutions. It also provides solutions that enable businesses or governments to make payments to businesses, including Virtual Card Number, which is generated dynamically from a physical card and leverages the credit limit of the funding account; a platform to optimize supplier payment enablement campaigns for financial institutions; and treasury intelligence platform that offers corporations with recommendations to enhance working capital performance and accelerate spend on cards. In addition, the company offers Mastercard Send, which partners with digital messaging and payment platforms to enable consumers to send money directly within applications to other consumers; and Mastercard Cross-Border Services enables a range of payment flows through a distribution network with a single point of access to send and receive money globally through various channels, including bank accounts, mobile wallets, cards, and cash payouts. Further, it provides cyber and intelligence solutions; insights and analytics, consulting, marketing, loyalty, processing, and payment gateway solutions for e-commerce merchants; and open banking and digital identity services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus name. Mastercard Incorporated was founded in 1966 and is headquartered in Purchase, New York.