Analyzing Mastercard (NYSE:MA) & Advantage Solutions (NASDAQ:ADV)

Mastercard (NYSE:MAGet Rating) and Advantage Solutions (NASDAQ:ADVGet Rating) are both business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.

Profitability

This table compares Mastercard and Advantage Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mastercard 45.22% 148.94% 27.19%
Advantage Solutions 1.72% 6.80% 3.03%

Institutional and Insider Ownership

75.1% of Mastercard shares are held by institutional investors. Comparatively, 26.8% of Advantage Solutions shares are held by institutional investors. 0.3% of Mastercard shares are held by insiders. Comparatively, 4.9% of Advantage Solutions shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Mastercard and Advantage Solutions’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mastercard $18.88 billion 17.75 $8.69 billion $10.01 34.83
Advantage Solutions $3.60 billion 0.22 $54.49 million $0.22 11.23

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

Volatility & Risk

Mastercard has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, Advantage Solutions has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Mastercard and Advantage Solutions, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mastercard 1 1 16 0 2.83
Advantage Solutions 0 3 0 0 2.00

Mastercard presently has a consensus target price of $396.35, indicating a potential upside of 13.68%. Advantage Solutions has a consensus target price of $5.67, indicating a potential upside of 129.42%. Given Advantage Solutions’ higher possible upside, analysts clearly believe Advantage Solutions is more favorable than Mastercard.

Summary

Mastercard beats Advantage Solutions on 11 of the 14 factors compared between the two stocks.

About Mastercard

(Get Rating)

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers other payment-related products and services. The company offers integrated products and value-added services for account holders, merchants, financial institutions, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; prepaid programs and management services; commercial credit and debit payment products and solutions; and payment products and solutions that allow its customers to access funds in deposit and other accounts. It also provides value-added products and services comprising cyber and intelligence solutions for parties to transact, as well as proprietary insights, drawing on principled use of consumer, and merchant data services. In addition, the company offers analytics, test and learn, consulting, managed services, loyalty, processing, and payment gateway solutions for e-commerce merchants. Further, it provides open banking and digital identity platforms services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus. Mastercard Incorporated was founded in 1966 and is headquartered in Purchase, New York.

About Advantage Solutions

(Get Rating)

Advantage Solutions Inc. provides outsourced solutions to consumer goods companies and retailers in North America and internationally. It operates in two segments, Sales and Marketing. The Sales segment offers brand-centric services, such as headquarter relationship management; analytics, insights, and intelligence; administration; and brand-centric merchandising services. This segment also provides retailer-centric services comprising retailer-centric merchandising, in-store media, and digital commerce. The Marketing segment offers brand-centric services, including shopper and consumer marketing, and brand experiential services; and retailer-centric services, such as retail experiential, private label, digital marketing, and digital media and advertising. The company was formerly known as Karman Holding Corp. and changed its name to Advantage Solutions Inc. in March 2016. Advantage Solutions Inc. was founded in 1987 and is headquartered in Irvine, California.

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