Zillow Group (NASDAQ:ZG) and Global Payments (NASDAQ:GPN) Critical Contrast

Zillow Group (NASDAQ:ZG) and Global Payments (NYSE:GPN) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Institutional and Insider Ownership

24.2% of Zillow Group shares are held by institutional investors. Comparatively, 97.4% of Global Payments shares are held by institutional investors. 20.9% of Zillow Group shares are held by company insiders. Comparatively, 0.9% of Global Payments shares are held 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.

Dividends

Global Payments pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Zillow Group does not pay a dividend. Global Payments pays out 0.8% of its earnings in the form of a dividend.

Profitability

This table compares Zillow Group and Global Payments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zillow Group -11.35% -3.18% -2.46%
Global Payments 13.69% 19.83% 6.05%

Valuation and Earnings

This table compares Zillow Group and Global Payments’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zillow Group $1.33 billion 6.64 -$119.86 million ($0.26) -166.08
Global Payments $3.37 billion 7.41 $452.05 million $5.19 30.57

Global Payments has higher revenue and earnings than Zillow Group. Zillow Group is trading at a lower price-to-earnings ratio than Global Payments, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Zillow Group has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Global Payments has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Zillow Group and Global Payments, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zillow Group 3 8 6 0 2.18
Global Payments 1 4 19 0 2.75

Zillow Group currently has a consensus price target of $45.93, suggesting a potential upside of 6.37%. Global Payments has a consensus price target of $147.19, suggesting a potential downside of 7.22%. Given Zillow Group’s higher probable upside, analysts clearly believe Zillow Group is more favorable than Global Payments.

Summary

Global Payments beats Zillow Group on 13 of the 16 factors compared between the two stocks.

Zillow Group Company Profile

Zillow Group, Inc. operates real estate and home-related brands on mobile and the Web in the United States. The company offers a portfolio of brands and products to empowering consumers with unparalleled data, inspiration, and knowledge around homes and connecting them with real estate professionals. Its brands focus on various stages of the home lifecycle, including renting, buying, selling, and financing. The company's portfolio of consumer brands comprise real estate and rental marketplaces, such as Zillow, Trulia, Mortgage Lenders of America, StreetEasy, HotPads, Naked Apartments, RealEstate.com, and Out East. It also provides a suite of marketing software and technology solutions; and owns and operates various business brands for real estate, rental, and mortgage professionals comprising Mortech, dotloop, Bridge Interactive, and New Home Feed. In addition, the company offers advertising services. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.

Global Payments Company Profile

Global Payments Inc. provides payment technology and software solutions for card, electronic, check, and digital-based payments. The company operates in three segments: North America, Europe, and Asia-Pacific. It offers authorization services, settlement and funding services, customer support and help-desk functions, chargeback resolution, terminal rental, sales and deployment, payment security services, consolidated billing and statements, and online reporting services. The company also provides an array of enterprise software solutions that streamline business operations of its customers in various vertical markets; and value-added services, such as analytic and engagement tools, as well as payroll services. In addition, it offers credit and debit card transaction processing services for various international card brands, including American Express, Discover Card, JCB, MasterCard, UnionPay International, and Visa; and non-traditional payment methods, as well as certain domestic debit networks, such as Interac in Canada. Further, the company provides e-commerce and omnichannel solutions; and gaming solutions to licensed gaming operators. It serves customers in various industries comprising education, restaurant, event management, hospitality, retail, healthcare, convenience stores and petroleum, professional services, automotive, and lodging. The company markets its products and services through direct sales force, trade associations, agent and enterprise software providers, referral arrangements with value-added resellers, and independent sales organizations in 32 countries of North America, Europe, the Asia-Pacific region, and Brazil. Global Payments Inc. was founded in 1967 and is headquartered in Atlanta, Georgia.

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