Critical Comparison: Fiserv (NYSE:FI) versus DLocal (NASDAQ:DLO)

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

Insider & Institutional Ownership

90.1% of DLocal shares are owned by institutional investors. Comparatively, 91.0% of Fiserv shares are owned by institutional investors. 45.4% of DLocal shares are owned by insiders. Comparatively, 0.8% of Fiserv shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for DLocal and Fiserv, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DLocal	0	7	2	0	2.22
Fiserv	0	4	20	2	2.92

DLocal currently has a consensus price target of $12.61, suggesting a potential upside of 11.11%. Fiserv has a consensus price target of $214.29, suggesting a potential downside of 3.34%. Given DLocal’s higher possible upside, equities analysts plainly believe DLocal is more favorable than Fiserv.

Profitability

This table compares DLocal and Fiserv’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DLocal	16.35%	32.59%	12.95%
Fiserv	15.22%	17.10%	5.61%

Risk and Volatility

DLocal has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Fiserv has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Valuation and Earnings

This table compares DLocal and Fiserv”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DLocal	$650.35 million	5.17	$148.96 million	$0.40	28.38
Fiserv	$19.09 billion	6.61	$3.07 billion	$5.20	42.63

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

Summary

Fiserv beats DLocal on 10 of the 15 factors compared between the two stocks.

About DLocal

DLocal Limited operates a payment processing platform worldwide. The company offers pay-in solution which the business and get paid for their products and services through various payment methods, including international and local cards, online bank transfers and direct debit, cash, and alternative payment methods. It also provides pay-out solution used for merchants to scale pay-out operations. In addition, the company offers dLocal for Platforms, an end-to-end payment solution that offers a range of services to help platforms manage payments. It serves its products to commerce, streaming, ride-hailing, financial services, advertising, SaaS, travel, e-learning, on-demand delivery, and gaming and crypto industries. DLocal Limited was founded in 2016 and is headquartered in Montevideo, Uruguay.

About Fiserv

Fiserv, Inc., together with its subsidiaries, provides payments and financial services technology services in the United States, Europe, the Middle East and Africa, Latin America, the Asia-Pacific, and internationally. It operates through Merchant Acceptance, Financial Technology, and Payments and Network segments. The Merchant Acceptance segment provides merchant acquiring and digital commerce services; mobile payment services; security and fraud protection products; Clover, a cloud based POS and integrated commerce operating system for small and mid-sized businesses and independent software vendors; and Carat, an integrated operating system for large businesses. This segment distributes through various channels, including direct sales teams, strategic partnerships with agent sales forces, independent software vendors, financial institutions, and other strategic partners in the form of joint venture alliances, revenue sharing alliances, and referral agreement. The Financial Technology segment offers customer deposit and loan accounts, as well as manages an institution's general ledger and central information files. This segment also provides digital banking, financial and risk management, professional services and consulting, check processing, and other products and services. The Payments and Network segment offers card transactions, such as debit, credit, and prepaid card processing and services; funds access, debit payments, cardless ATM access, and surcharge-free ATM network; security and fraud protection products; card production; print services; and various network services, as well as non-card digital payment software and services, including bill payment, account-to-account transfers, person-to-person payments, electronic billing, and security and fraud protection products. It serves merchants, banks, credit unions, other financial institutions, and corporate clients. Fiserv, Inc. was incorporated in 1984 and is headquartered in Milwaukee, Wisconsin.