Contrasting DoubleDown Interactive (NASDAQ:DDI) & EVERTEC (NYSE:EVTC)

DoubleDown Interactive (NASDAQ:DDI) and EVERTEC (NYSE:EVTC) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, institutional ownership, valuation, dividends and analyst recommendations.

Volatility and Risk

DoubleDown Interactive has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, EVERTEC has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for DoubleDown Interactive and EVERTEC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DoubleDown Interactive	0	0	3	1	3.25
EVERTEC	0	2	2	0	2.50

DoubleDown Interactive presently has a consensus price target of $20.67, suggesting a potential upside of 110.67%. EVERTEC has a consensus price target of $35.67, suggesting a potential upside of 7.23%. Given DoubleDown Interactive’s stronger consensus rating and higher probable upside, equities analysts plainly believe DoubleDown Interactive is more favorable than EVERTEC.

Insider and Institutional Ownership

96.8% of EVERTEC shares are held by institutional investors. 0.8% of EVERTEC shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares DoubleDown Interactive and EVERTEC”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DoubleDown Interactive	$341.33 million	1.42	$124.02 million	$2.51	3.91
EVERTEC	$845.49 million	2.52	$79.72 million	$1.73	19.23

DoubleDown Interactive has higher earnings, but lower revenue than EVERTEC. DoubleDown Interactive is trading at a lower price-to-earnings ratio than EVERTEC, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DoubleDown Interactive and EVERTEC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DoubleDown Interactive	36.37%	15.52%	14.31%
EVERTEC	10.20%	33.01%	8.85%

Summary

DoubleDown Interactive beats EVERTEC on 8 of the 15 factors compared between the two stocks.

About DoubleDown Interactive

DoubleDown Interactive Co., Ltd. engages in the development and publishing of casual games and mobile applications in South Korea. It publishes digital gaming content on mobile and web platforms. The company offers DoubleDown Casino, DoubleDown Classic, DoubleDown Fort Knox, and cash me out games, as well as sells in-game virtual chips. Its games are primarily distributed, marketed, and promoted through third party platform providers. The company was formerly known as The8Games Co., Ltd. and changed its name to DoubleDown Interactive Co., Ltd. in December 2019. The company was incorporated in 2008 and is headquartered in Seoul, South Korea. DoubleDown Interactive Co., Ltd. is a subsidiary of DoubleU Games Co., Ltd.

About EVERTEC

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.