Reviewing GreenSky (GSKY) & Alliance Data Systems (ADS)

GreenSky (NASDAQ:GSKY) and Alliance Data Systems (NYSE:ADS) are both mid-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Valuation and Earnings

This table compares GreenSky and Alliance Data Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GreenSky $414.67 million 4.99 $24.26 million $0.07 163.00
Alliance Data Systems $7.79 billion 0.99 $963.10 million $21.56 6.81

Alliance Data Systems has higher revenue and earnings than GreenSky. Alliance Data Systems is trading at a lower price-to-earnings ratio than GreenSky, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for GreenSky and Alliance Data Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GreenSky 0 6 7 0 2.54
Alliance Data Systems 1 5 7 0 2.46

GreenSky currently has a consensus target price of $17.77, suggesting a potential upside of 55.76%. Alliance Data Systems has a consensus target price of $218.09, suggesting a potential upside of 48.53%. Given GreenSky’s stronger consensus rating and higher possible upside, equities analysts clearly believe GreenSky is more favorable than Alliance Data Systems.

Profitability

This table compares GreenSky and Alliance Data Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GreenSky 6.27% -120.94% 6.31%
Alliance Data Systems 13.10% 51.42% 3.90%

Insider and Institutional Ownership

32.6% of GreenSky shares are owned by institutional investors. Comparatively, 94.4% of Alliance Data Systems shares are owned by institutional investors. 2.8% of Alliance Data Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Alliance Data Systems pays an annual dividend of $2.52 per share and has a dividend yield of 1.7%. GreenSky does not pay a dividend. Alliance Data Systems pays out 11.7% of its earnings in the form of a dividend.

Summary

Alliance Data Systems beats GreenSky on 8 of the 14 factors compared between the two stocks.

GreenSky Company Profile

GreenSky, Inc., a technology company, provides point-of-sale financing and payment solutions to merchants, consumers, and banks. It offers a proprietary technology infrastructure that support the full transaction lifecycle, including credit application, underwriting, real-time allocation to bank partners, document distribution, funding, settlement, and servicing functions. The company was incorporated in 2017 and is based in Atlanta, Georgia.

Alliance Data Systems Company Profile

Alliance Data Systems Corporation provides data-driven marketing and loyalty solutions worldwide. It operates through three segments: LoyaltyOne, Epsilon, and Card Services. The company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. It also focuses on facilitating and managing interactions between its clients and their customers through various consumer marketing channels, including in-store, online, email, social media, mobile, direct mail, and telephone. The company captures and analyzes data created during each customer interaction, leveraging the insight derived from that data to enable clients to identify and acquire new customers and to enhance customer loyalty. It serves clients across various end-markets, including financial services, specialty retail, grocery and drugstore chains, petroleum retail, automotive, hospitality and travel, telecommunications, insurance, and healthcare. Alliance Data Systems Corporation was founded in 1996 and is headquartered in Plano, Texas.

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