Analyzing Newtek Business Services Corp. (NEWT) and Its Peers

Newtek Business Services Corp. (NASDAQ: NEWT) is one of 31 publicly-traded companies in the “Transaction & Payment Services” industry, but how does it weigh in compared to its competitors? We will compare Newtek Business Services Corp. to similar companies based on the strength of its dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Risk and Volatility

Newtek Business Services Corp. has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500. Comparatively, Newtek Business Services Corp.’s competitors have a beta of 1.30, indicating that their average share price is 30% more volatile than the S&P 500.

Valuation & Earnings

This table compares Newtek Business Services Corp. and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Newtek Business Services Corp. $35.85 million $2.91 million 9.44
Newtek Business Services Corp. Competitors $1.64 billion $481.00 million 28.94

Newtek Business Services Corp.’s competitors have higher revenue and earnings than Newtek Business Services Corp.. Newtek Business Services Corp. is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Newtek Business Services Corp. and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Newtek Business Services Corp. 81.35% 7.97% 4.23%
Newtek Business Services Corp. Competitors 10.78% 15.97% 5.23%

Dividends

Newtek Business Services Corp. pays an annual dividend of $1.76 per share and has a dividend yield of 9.9%. Newtek Business Services Corp. pays out 93.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Transaction & Payment Services” companies pay a dividend yield of 1.9% and pay out 60.3% of their earnings in the form of a dividend.

Insider and Institutional Ownership

22.8% of Newtek Business Services Corp. shares are owned by institutional investors. Comparatively, 56.7% of shares of all “Transaction & Payment Services” companies are owned by institutional investors. 6.7% of Newtek Business Services Corp. shares are owned by company insiders. Comparatively, 18.1% of shares of all “Transaction & Payment Services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Newtek Business Services Corp. and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Newtek Business Services Corp. 0 2 0 0 2.00
Newtek Business Services Corp. Competitors 114 697 1033 12 2.51

Newtek Business Services Corp. presently has a consensus price target of $18.00, indicating a potential upside of 1.41%. As a group, “Transaction & Payment Services” companies have a potential upside of 8.05%. Given Newtek Business Services Corp.’s competitors stronger consensus rating and higher probable upside, analysts clearly believe Newtek Business Services Corp. has less favorable growth aspects than its competitors.

Summary

Newtek Business Services Corp. competitors beat Newtek Business Services Corp. on 12 of the 15 factors compared.

About Newtek Business Services Corp.

Newtek Business Services Corp. is an internally managed non-diversified closed-end management investment company. The Company’s investment objective is to generate both current income and capital appreciation primarily through loans originated by its small business finance platform and its equity investments in certain portfolio companies that it controls. The Company is a national non-bank lender that provides, together with its controlled portfolio companies, a range of business services and financial products under the Newtek brand to the small and medium-sized business (SMB) market. The Company issues debt and makes equity investments in portfolio companies in various industries. Its products and services include Business Lending including the United States Small Business Administration (SBA) 7(a) and 504 lending, Electronic Payment Processing, Managed Technology Solutions (Cloud Computing), Data Backup, and Payroll and Benefits Solutions to SMB accounts across all industries.

Receive News & Ratings for Newtek Business Services Corp. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Newtek Business Services Corp. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply