Critical Survey: NEWTEK Business Services (NASDAQ:NEWT) versus International Monetary Systems (NASDAQ:ITNM)

NEWTEK Business Services (NASDAQ:NEWT) and International Monetary Systems (OTCMKTS:ITNM) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.

Institutional and Insider Ownership

20.3% of NEWTEK Business Services shares are held by institutional investors. 6.7% of NEWTEK Business Services shares are held by insiders. Comparatively, 71.3% of International Monetary Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for NEWTEK Business Services and International Monetary Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NEWTEK Business Services 0 1 1 0 2.50
International Monetary Systems 0 0 0 0 N/A

NEWTEK Business Services presently has a consensus target price of $13.00, suggesting a potential downside of 22.11%. Given NEWTEK Business Services’ higher probable upside, equities analysts plainly believe NEWTEK Business Services is more favorable than International Monetary Systems.

Risk & Volatility

NEWTEK Business Services has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, International Monetary Systems has a beta of -0.45, suggesting that its share price is 145% less volatile than the S&P 500.

Profitability

This table compares NEWTEK Business Services and International Monetary Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NEWTEK Business Services 69.37% 14.90% 6.18%
International Monetary Systems N/A N/A N/A

Valuation and Earnings

This table compares NEWTEK Business Services and International Monetary Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NEWTEK Business Services $59.29 million 5.86 $41.13 million $2.33 7.16
International Monetary Systems N/A N/A N/A N/A N/A

NEWTEK Business Services has higher revenue and earnings than International Monetary Systems.

Summary

NEWTEK Business Services beats International Monetary Systems on 8 of the 9 factors compared between the two stocks.

NEWTEK Business Services Company Profile

Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. The firm also seeks to invest in early stage businesses. The firm seeks to makes both debt and equity investments. Under debt investments, it focuses on first lien loans, which have terms of 1 to 25 years; second lien loans, which have terms of 5 to 25 years, and unsecured loans, which are provided to meet short-term funding needs and are repaid within 6 to 12 months. It operates through Electronic Payment Processing, Managed Technology Solutions, Small Business Finance, and Capcos segments. The company originates small business administration loans for the purpose of acquiring commercial real estate, machinery, equipment, and inventory, as well as to refinance debt and fund franchises, working capital, and business acquisitions; and offers small business loan servicing and consulting services to the Federal Deposit Insurance Corporation and various other financial institutions, as well as provides management services. Its electronic payment processing services include credit and debit card processing, check approval, ancillary processing equipment and software to merchants, eCommerce, electronic solutions to accept non-cash payments, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs. The company also provides Website hosting, dedicated server, and cloud hosting services; Web design and development; Internet marketing; data storage and backup and other related services; and ecommerce services, such as payment processing, online shopping cart tools, Website design and Web related services; Accounts Receivable Financing, and The Secure Gateway. In addition, it offers Newtek Advantage, a mobile, real-time operating platform enabling a business to access data on a smartphone, tablet, laptop, or PC for eCommerce, credit/debit transactions, Website statistics, payroll, insurance, and business loans. Further, the company sells personal, commercial, and health/benefits lines of insurance products; and payroll management processing and employee tax filing services. It has strategic alliances with American International Group, CTAA, Navy Federal Credit Union, Credit Union National Association, Pershing, and others to provide agent services to small business clients. The firm seeks to invest in New York and Louisiana area. The firm seeks to invest $0.3 million to $3 million in businesses. It provides small business terms loans ranging from $0.05 million to $10 million. The firm also provides account receivable financing ranging from $0.05 million to $1.5 million. It also provides $0.05 million to $10 million financing to owner occupied real estate businesses whose average net income over the last 2 years must not exceed $2.5 million. Newtek Business Services Corp., formerly known as Newtek Business Services Inc., was incorporated on August 26, 2013 and is headquartered in Lake Success, New York with additional offices in Garden City, New York; Miami, Florida; Milwaukee, Wisconsin; New Orleans, Louisiana; and New York, New York.

International Monetary Systems Company Profile

International Monetary Systems, Ltd. through its subsidiaries, owns, manages, and operates trade exchanges and other related businesses in the United States and Canada. Trade exchanges or barter networks are financial service firms, which permit companies and individuals to exchange goods and services utilizing an electronic currency, ‘trade dollars'. It serves approximately 15,000 barter customers. International Monetary Systems, Ltd. was founded in 1985 and is headquartered in New Berlin, Wisconsin.

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