Analyzing Fiserv (NYSE:FI) and First Advantage (NYSE:FA)

Fiserv (NYSE:FI) and First Advantage (NYSE:FA) are both business services companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Fiserv and First Advantage, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fiserv	0	2	21	2	3.00
First Advantage	0	3	6	0	2.67

Fiserv presently has a consensus target price of $239.83, indicating a potential upside of 11.60%. First Advantage has a consensus target price of $58.67, indicating a potential upside of 348.18%. Given First Advantage’s higher possible upside, analysts plainly believe First Advantage is more favorable than Fiserv.

Volatility & Risk

Fiserv has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, First Advantage has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Institutional & Insider Ownership

91.0% of Fiserv shares are owned by institutional investors. Comparatively, 94.9% of First Advantage shares are owned by institutional investors. 0.8% of Fiserv shares are owned by company insiders. Comparatively, 5.3% of First Advantage shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Fiserv and First Advantage’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fiserv	15.31%	17.93%	5.97%
First Advantage	0.65%	13.16%	7.33%

Valuation and Earnings

This table compares Fiserv and First Advantage”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fiserv	$383.42 million	314.60	$3.13 billion	$5.39	39.87
First Advantage	$860.21 million	2.64	$37.29 million	($0.69)	-18.97

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

Summary

Fiserv beats First Advantage on 8 of the 15 factors compared between the two stocks.

About Fiserv

Fiserv, Inc., together with its subsidiaries, provides payments and financial services technology services in the United States, Europe, the Middle East and Africa, Latin America, the Asia-Pacific, and internationally. It operates through Merchant Acceptance, Financial Technology, and Payments and Network segments. The Merchant Acceptance segment provides merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Clover, a cloud based POS and integrated commerce operating system for small and mid-sized businesses and independent software vendors; and Carat, an integrated operating system for large businesses. This segment distributes through various channels, including direct sales teams, strategic partnerships with agent sales forces, independent software vendors, financial institutions, and other strategic partners in the form of joint venture alliances, revenue sharing alliances, and referral agreement. The Financial Technology segment offers customer deposit and loan accounts, as well as manages an institution's general ledger and central information files. This segment also provides digital banking, financial and risk management, professional services and consulting, check processing, and other products and services. The Payments and Network segment offers card transactions, such as debit, credit, and prepaid card processing and services; funds access, debit payments, cardless ATM access, and surcharge-free ATM network; security and fraud protection products; card production; print services; and various network services, as well as non-card digital payment software and services, including bill payment, account-to-account transfers, person-to-person payments, electronic billing, and security and fraud protection products. It serves merchants, banks, credit unions, other financial institutions, and corporate clients. Fiserv, Inc. was incorporated in 1984 and is headquartered in Milwaukee, Wisconsin.

About First Advantage

First Advantage Corporation provides employment background screening, identity, and verification solutions worldwide. It offers pre-onboarding products and solutions, such as criminal background checks, drug/health screening, extended workforce screening, FBI channeling, identity checks and biometric fraud mitigation tools, education/work history verification, driver records and compliance, healthcare credentials, executive screening, and other screening products. The company also provides post-onboarding solutions, including criminal records monitoring, healthcare sanctions, motor vehicle records, social media screening, and global sanctions and licenses; and other products comprising fleet/vehicle compliance, hiring tax credits and incentives, resident/tenant screening, and investigative research. Its products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security in global enterprises, mid-sized, and small companies. The company was formerly known as Fastball Intermediate, Inc. and changed its name to First Advantage Corporation in March 2021. First Advantage Corporation was founded in 2002 and is based in Atlanta, Georgia.