Comparing NEWTEK Business Services (NASDAQ:NEWT) & CIELO S A/S (NASDAQ:CIOXY)

NEWTEK Business Services (NASDAQ:NEWT) and CIELO S A/S (OTCMKTS:CIOXY) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Institutional & Insider Ownership

18.1% of NEWTEK Business Services shares are owned by institutional investors. Comparatively, 0.0% of CIELO S A/S shares are owned by institutional investors. 6.7% of NEWTEK Business Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

NEWTEK Business Services has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, CIELO S A/S has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500.

Dividends

NEWTEK Business Services pays an annual dividend of $1.84 per share and has a dividend yield of 8.5%. CIELO S A/S pays an annual dividend of $0.30 per share and has a dividend yield of 16.2%. NEWTEK Business Services pays out 94.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NEWTEK Business Services has raised its dividend for 3 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for NEWTEK Business Services and CIELO S A/S, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NEWTEK Business Services 0 1 2 0 2.67
CIELO S A/S 0 2 1 0 2.33

NEWTEK Business Services currently has a consensus price target of $17.89, suggesting a potential downside of 17.58%. Given NEWTEK Business Services’ stronger consensus rating and higher possible upside, equities research analysts plainly believe NEWTEK Business Services is more favorable than CIELO S A/S.

Valuation and Earnings

This table compares NEWTEK Business Services and CIELO S A/S’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NEWTEK Business Services $49.51 million 8.40 $35.68 million $1.94 11.19
CIELO S A/S $3.22 billion 1.56 $1.12 billion N/A N/A

CIELO S A/S has higher revenue and earnings than NEWTEK Business Services.

Profitability

This table compares NEWTEK Business Services and CIELO S A/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NEWTEK Business Services 68.61% 9.87% 4.31%
CIELO S A/S 26.20% 19.91% 3.51%

Summary

NEWTEK Business Services beats CIELO S A/S on 11 of the 16 factors compared between the two stocks.

NEWTEK Business Services Company Profile

Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. The firm also seeks to invest in early stage businesses. The firm seeks to makes both debt and equity investments. Under debt investments, it focuses on first lien loans, which have terms of 1 to 25 years; second lien loans, which have terms of 5 to 25 years, and unsecured loans, which are provided to meet short-term funding needs and are repaid within 6 to 12 months. It operates through Electronic Payment Processing, Managed Technology Solutions, Small Business Finance, and Capcos segments. The company originates small business administration loans for the purpose of acquiring commercial real estate, machinery, equipment, and inventory, as well as to refinance debt and fund franchises, working capital, and business acquisitions; and offers small business loan servicing and consulting services to the Federal Deposit Insurance Corporation and various other financial institutions, as well as provides management services. Its electronic payment processing services include credit and debit card processing, check approval, ancillary processing equipment and software to merchants, eCommerce, electronic solutions to accept non-cash payments, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs. The company also provides Website hosting, dedicated server, and cloud hosting services; Web design and development; Internet marketing; data storage and backup and other related services; and ecommerce services, such as payment processing, online shopping cart tools, Website design and Web related services; Accounts Receivable Financing, and The Secure Gateway. In addition, it offers Newtek Advantage, a mobile, real-time operating platform enabling a business to access data on a smartphone, tablet, laptop, or PC for eCommerce, credit/debit transactions, Website statistics, payroll, insurance, and business loans. Further, the company sells personal, commercial, and health/benefits lines of insurance products; and payroll management processing and employee tax filing services. It has strategic alliances with American International Group, CTAA, Navy Federal Credit Union, Credit Union National Association, Pershing, and others to provide agent services to small business clients. The firm seeks to invest in New York and Louisiana area. The firm seeks to invest $0.3 million to $3 million in businesses. It provides small business terms loans ranging from $0.05 million to $10 million. The firm also provides account receivable financing ranging from $0.05 million to $1.5 million. It also provides $0.05 million to $10 million financing to owner occupied real estate businesses whose average net income over the last 2 years must not exceed $2.5 million. Newtek Business Services Corp., formerly known as Newtek Business Services Inc., was incorporated on August 26, 2013 and is headquartered in Lake Success, New York with additional offices in Garden City, New York; Miami, Florida; Milwaukee, Wisconsin; New Orleans, Louisiana; and New York, New York.

CIELO S A/S Company Profile

Cielo S.A., through its subsidiaries, provides payment services in Brazil. The company is involved in the provision of services related to credit and debit cards, and other payment methods, including signing up of merchants and service providers; rental, installation, and maintenance of point of sale terminals; and data capture and processing of electronic and manual transactions. It also offers services related in the processing means of payments that involve cards, maintenance services, and contacts with merchants for acceptance of credit and debit cards; data transmission services to load fixed or mobile phone credits; software development and licensing of computer programs; electronic transactions processing; IT services for collection and management of accounts payable and receivable; and data processing services and support services to medical companies. The company was formerly known as Companhia Brasileira de Meios de Pagamento and changed its name to Cielo S.A. in December 2009. Cielo S.A. was founded in 1995 and is headquartered in Barueri, Brazil.

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