Comparing Liquidity Services (NASDAQ:LQDT) and Mastercard (NYSE:MA)

Liquidity Services (NASDAQ:LQDT) and Mastercard (NYSE:MA) are both business services companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, valuation, earnings and dividends.

Volatility & Risk

Liquidity Services has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Mastercard has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500.

Profitability

This table compares Liquidity Services and Mastercard’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liquidity Services	6.37%	20.94%	11.32%
Mastercard	45.71%	188.47%	30.05%

Insider & Institutional Ownership

71.2% of Liquidity Services shares are owned by institutional investors. Comparatively, 97.3% of Mastercard shares are owned by institutional investors. 28.4% of Liquidity Services shares are owned by insiders. Comparatively, 0.1% of Mastercard 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.

Earnings & Valuation

This table compares Liquidity Services and Mastercard”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liquidity Services	$363.32 million	3.10	$19.99 million	$0.75	48.64
Mastercard	$28.17 billion	18.40	$12.87 billion	$13.89	40.66

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Liquidity Services and Mastercard, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liquidity Services	0	0	2	0	3.00
Mastercard	0	4	24	2	2.93

Liquidity Services presently has a consensus target price of $38.50, indicating a potential upside of 5.54%. Mastercard has a consensus target price of $606.11, indicating a potential upside of 7.32%. Given Mastercard’s higher probable upside, analysts clearly believe Mastercard is more favorable than Liquidity Services.

Summary

Mastercard beats Liquidity Services on 11 of the 15 factors compared between the two stocks.

About Liquidity Services

Liquidity Services, Inc. provides e-commerce marketplaces, self-directed auction listing tools, and value-added services in the United States and internationally. The company operates through four segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Its marketplaces include liquidation.com that enable corporations to sell surplus and salvage consumer goods and retail capital assets; GovDeals marketplace, which provides self-directed service solutions in which sellers list their own assets that enables local and state government entities, and commercial businesses located in the United States and Canada to sell surplus and salvage assets; and AllSurplus, a centralized marketplace that connects global buyer base with assets from across the network of marketplaces in a single destination. The company also offers a suite of services, including surplus management, asset valuation, asset sales, marketing, returns management, asset recovery, and ecommerce services. In addition, it operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing, and agriculture sectors. The company offers products from industry verticals, such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet and transportation equipment, and specialty equipment. The company was incorporated in 1999 and is headquartered in Bethesda, Maryland.

About Mastercard

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The company offers integrated products and value-added services for account holders, merchants, financial institutions, digital partners, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid programs services; and commercial credit, debit, and prepaid payment products and solutions. It also provides solutions that enable businesses or governments to make payments to businesses, including Virtual Card Number, which is generated dynamically from a physical card and leverages the credit limit of the funding account; a platform to optimize supplier payment enablement campaigns for financial institutions; and treasury intelligence platform that offers corporations with recommendations to enhance working capital performance and accelerate spend on cards. In addition, the company offers Mastercard Send, which partners with digital messaging and payment platforms to enable consumers to send money directly within applications to other consumers; and Mastercard Cross-Border Services enables a range of payment flows through a distribution network with a single point of access to send and receive money globally through various channels, including bank accounts, mobile wallets, cards, and cash payouts. Further, it provides cyber and intelligence solutions; insights and analytics, consulting, marketing, loyalty, processing, and payment gateway solutions for e-commerce merchants; and open banking and digital identity services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus name. Mastercard Incorporated was founded in 1966 and is headquartered in Purchase, New York.