Sparta Commercial Services (OTCMKTS:SRCO) and NEWTEK Business Services (NASDAQ:NEWT) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.
Volatility & Risk
Sparta Commercial Services has a beta of 3.45, meaning that its stock price is 245% more volatile than the S&P 500. Comparatively, NEWTEK Business Services has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500.
Valuation and Earnings
This table compares Sparta Commercial Services and NEWTEK Business Services’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Sparta Commercial Services||$640,000.00||3.91||-$5.57 million||N/A||N/A|
|NEWTEK Business Services||$38.91 million||9.31||$38.97 million||$1.77||10.82|
NEWTEK Business Services has higher revenue and earnings than Sparta Commercial Services.
NEWTEK Business Services pays an annual dividend of $2.00 per share and has a dividend yield of 10.4%. Sparta Commercial Services does not pay a dividend. NEWTEK Business Services pays out 113.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NEWTEK Business Services has raised its dividend for 3 consecutive years.
Insider and Institutional Ownership
20.7% of NEWTEK Business Services shares are held by institutional investors. 6.3% of NEWTEK Business Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Sparta Commercial Services and NEWTEK Business Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sparta Commercial Services||N/A||N/A||N/A|
|NEWTEK Business Services||102.01%||8.51%||4.24%|
This is a breakdown of recent ratings and target prices for Sparta Commercial Services and NEWTEK Business Services, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sparta Commercial Services||0||0||0||0||N/A|
|NEWTEK Business Services||0||2||2||0||2.50|
NEWTEK Business Services has a consensus target price of $18.17, indicating a potential downside of 5.17%. Given NEWTEK Business Services’ higher probable upside, analysts plainly believe NEWTEK Business Services is more favorable than Sparta Commercial Services.
NEWTEK Business Services beats Sparta Commercial Services on 12 of the 14 factors compared between the two stocks.
Sparta Commercial Services Company Profile
Sparta Commercial Services, Inc., a technology company, develops, markets, and manages business mobile applications for smartphones and tablets under the iMobileApp name. It offers mobile applications for racetracks, private clubs, country clubs, restaurants, and grocery stores. The company also owns and manages Websites, which sell on-demand motorcycle, recreational vehicle, power-sport vehicle, and truck title history reports for consumers, retail dealers, auction houses, insurance companies, and banks/finance companies. In addition, it offers an equipment-leasing product for local and state agencies that helps to finance their essential equipment needs, including police motorcycles, cruisers, buses, and EMS equipment. The company was founded in 2001 and is headquartered in New York, New York.
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.
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