Financial Review: Global Payments (NYSE:GPN) & Akamai Technologies (NASDAQ:AKAM)

Akamai Technologies (NASDAQ:AKAM) and Global Payments (NYSE:GPN) are both large-cap computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and target prices for Akamai Technologies and Global Payments, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Akamai Technologies	1	6	11	1	2.63
Global Payments	1	10	16	0	2.56

Akamai Technologies presently has a consensus target price of $116.47, suggesting a potential upside of 13.12%. Global Payments has a consensus target price of $137.52, suggesting a potential upside of 38.84%. Given Global Payments’ higher probable upside, analysts clearly believe Global Payments is more favorable than Akamai Technologies.

Volatility & Risk

Akamai Technologies has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, Global Payments has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Insider and Institutional Ownership

94.3% of Akamai Technologies shares are owned by institutional investors. Comparatively, 89.8% of Global Payments shares are owned by institutional investors. 1.8% of Akamai Technologies shares are owned by insiders. Comparatively, 1.0% of Global Payments shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Akamai Technologies and Global Payments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Akamai Technologies	16.01%	14.78%	6.85%
Global Payments	14.26%	11.93%	5.42%

Earnings & Valuation

This table compares Akamai Technologies and Global Payments”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Akamai Technologies	$3.93 billion	3.99	$547.63 million	$4.02	25.61
Global Payments	$9.90 billion	2.55	$986.23 million	$5.04	19.65

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

Summary

Akamai Technologies beats Global Payments on 9 of the 15 factors compared between the two stocks.

About Akamai Technologies

Akamai Technologies, Inc. provides cloud computing, security, and content delivery services in the United States and internationally. The company offers cloud solutions to keep infrastructure, websites, applications, application programming interfaces, and users safe from various cyberattacks and online threats while enhancing performance. It also provides web and mobile performance solutions to enable dynamic websites and applications; media delivery solutions, including video streaming and video player services, game and software delivery, broadcast operations, authoritative domain name system, resolution, and data and analytics; and cloud computing services, such as compute, storage, networking, database, and container management services to build, deploy, and secure applications and workloads. In addition, the company offers content delivery solutions; and an array of service and support to assist customers with integrating, configuring, optimizing, and managing its offerings. It sells its solutions through various channel partners. Akamai Technologies, Inc. was incorporated in 1998 and is headquartered in Cambridge, Massachusetts.

About Global Payments

Global Payments Inc. provides payment technology and software solutions for card, check, and digital-based payments in the Americas, Europe, and the Asia-Pacific. It operates through two segments, Merchant Solutions and Issuer Solutions. The Merchant Solutions segment offers authorization, settlement and funding, customer support, chargeback resolution, terminal rental, sales and deployment, payment security, and consolidated billing and reporting services. This segment also provides an array of enterprise software solutions that streamline business operations of its customers in various vertical markets; and value-added solutions and services, such as point-of-sale software, analytics and customer engagement, payroll and reporting, and human capital management. The Issuer Solutions segment offers solutions that enable financial institutions and retailers to manage their card portfolios through a platform; and commercial payments, account payables, and electronic payment alternatives solutions for businesses and governments. It 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. The company was founded in 1967 and is headquartered in Atlanta, Georgia.