Financial Contrast: Toast (NYSE:TOST) versus EVERTEC (NYSE:EVTC)

Toast (NYSE:TOST) and EVERTEC (NYSE:EVTC) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Valuation and Earnings

This table compares Toast and EVERTEC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toast	$3.87 billion	3.43	-$246.00 million	($0.50)	-57.54
EVERTEC	$785.12 million	2.81	$79.72 million	$0.99	34.57

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

Risk & Volatility

Toast has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, EVERTEC has a beta of 1.15, indicating that its share price is 15% more volatile than the S&P 500.

Profitability

This table compares Toast and EVERTEC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toast	-3.10%	-11.27%	-6.80%
EVERTEC	8.84%	32.08%	9.55%

Insider & Institutional Ownership

82.9% of Toast shares are owned by institutional investors. Comparatively, 96.8% of EVERTEC shares are owned by institutional investors. 13.3% of Toast shares are owned by insiders. Comparatively, 0.8% of EVERTEC shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Toast and EVERTEC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toast	1	8	9	1	2.53
EVERTEC	2	0	1	0	1.67

Toast currently has a consensus target price of $28.33, suggesting a potential downside of 1.52%. EVERTEC has a consensus target price of $34.33, suggesting a potential upside of 0.33%. Given EVERTEC’s higher possible upside, analysts clearly believe EVERTEC is more favorable than Toast.

Summary

EVERTEC beats Toast on 8 of the 15 factors compared between the two stocks.

About Toast

Toast, Inc. operates a cloud-based digital technology platform for the restaurant industry in the United States, Ireland, and India. The company offers software products for restaurant operations and point of sale, such as Toast POS, Toast now, multi-location management, kitchen display system, Toast mobile order and pay, Toast catering and events, Toast invoicing, Toast tables, and restaurant retail; and hardware products, including Toast flex, Toast flex for guest, Toast go 2, Toast tap, kiosks, and Delphi by Toast. It provides toast online ordering and toast takeout, first-party delivery toast delivery services, and third-party delivery integrations and orders hub; and loyalty, email marketing, and toast gift cards. In addition, the company offers payroll and team management, Sling by Toast, Toast pay card and payout, and tips manager, as well as partner-enabled products comprising insurance and benefits; supply chain and accounting products, such as xtraCHEF by toast; and financial technology solutions consisting of payment processing, toast capital, and purchase plans. Further, it offers reporting and analytics, Toast shop, and Toast partner connect and application programming interfaces. The company was formerly known as Opti Systems, Inc. and changed its name to Toast, Inc. in May 2012. Toast, Inc. was incorporated in 2011 and is headquartered in Boston, Massachusetts.

About EVERTEC

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.