Head to Head Review: Green Dot (NYSE:GDOT) and Usio (NASDAQ:USIO)

Usio (NASDAQ:USIO) and Green Dot (NYSE:GDOT) are both small-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.

Risk and Volatility

Usio has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

20.2% of Usio shares are owned by institutional investors. Comparatively, 92.6% of Green Dot shares are owned by institutional investors. 17.8% of Usio shares are owned by company insiders. Comparatively, 1.4% of Green Dot shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Usio and Green Dot, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Usio	2	0	1	0	1.67
Green Dot	2	2	2	1	2.29

Usio currently has a consensus price target of $4.00, suggesting a potential upside of 171.19%. Green Dot has a consensus price target of $13.50, suggesting a potential upside of 15.77%. Given Usio’s higher probable upside, equities research analysts clearly believe Usio is more favorable than Green Dot.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Usio	3.43%	-1.63%	-0.28%
Green Dot	-1.24%	9.93%	1.66%

Valuation & Earnings

This table compares Usio and Green Dot”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Usio	$83.85 million	0.47	$3.31 million	$0.10	14.75
Green Dot	$1.72 billion	0.37	-$26.70 million	($0.44)	-26.50

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

Summary

Usio beats Green Dot on 8 of the 15 factors compared between the two stocks.

About Usio

Usio, Inc., together with its subsidiaries, provides integrated electronic payment processing services to merchants and businesses in the United States. The company offers various types of automated clearing house (ACH) processing; and credit, prepaid card, and debit card-based processing services. Its ACH transaction processing services include Represented Check and Check Conversion for electronic payment facilitation. In addition, the company offers merchant account services for the processing of card-based transactions through the VISA, MasterCard, American Express, Discover, and JCB networks, including online terminal services accessed through a website or retail services accessed through a physical terminal. Further, it provides a proprietary web-based customer service application that allows companies to process one-time and recurring payments through e-checks or credit cards; and an interactive voice response telephone system to companies, which accept payments directly from consumers over the telephone using e-checks or credit cards. Additionally, the company offers prepaid and incentive card issuance services; and operates a prepaid core processing platform, as well as provides additional services, such as electronic bill presentment, document composition, document decomposition, and printing and mailing services for various industry verticals, including utilities and financial institutions. It markets and sells ACH products and services primarily through resellers; and prepaid card program directly to government entities, corporations, and to consumers through the internet. The company was formerly known as Payment Data Systems, Inc. and changed its name to Usio, Inc. in June 2019. Usio, Inc. was incorporated in 1998 and is headquartered in San Antonio, Texas.

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.