Usio (NASDAQ:USIO – Get Free Report) and Finance of America Companies (NYSE:FOA – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.
Profitability
This table compares Usio and Finance of America Companies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Usio | -1.63% | -8.20% | -1.26% |
| Finance of America Companies | -0.10% | 28.39% | 0.35% |
Institutional and Insider Ownership
20.2% of Usio shares are held by institutional investors. Comparatively, 97.2% of Finance of America Companies shares are held by institutional investors. 19.0% of Usio shares are held by insiders. Comparatively, 35.4% of Finance of America Companies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Usio | $85.39 million | 0.86 | -$2.51 million | ($0.06) | -42.83 |
| Finance of America Companies | $497.43 million | 0.56 | $45.24 million | ($3.01) | -5.36 |
Finance of America Companies has higher revenue and earnings than Usio. Usio is trading at a lower price-to-earnings ratio than Finance of America Companies, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Usio has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, Finance of America Companies has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and recommmendations for Usio and Finance of America Companies, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Usio | 1 | 1 | 2 | 0 | 2.25 |
| Finance of America Companies | 2 | 1 | 2 | 0 | 2.00 |
Usio currently has a consensus price target of $5.38, indicating a potential upside of 109.14%. Finance of America Companies has a consensus price target of $30.50, indicating a potential upside of 88.91%. Given Usio’s stronger consensus rating and higher possible upside, research analysts plainly believe Usio is more favorable than Finance of America Companies.
Summary
Finance of America Companies beats Usio on 9 of the 13 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 Finance of America Companies
Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.
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