Blackhawk Network (HAWK) and Medallion Financial (MFIN) Financial Survey

Blackhawk Network (NASDAQ: HAWK) and Medallion Financial (NASDAQ:MFIN) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Risk and Volatility

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Blackhawk Network has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Medallion Financial has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500.

Earnings and Valuation

This table compares Blackhawk Network and Medallion Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Blackhawk Network $2.23 billion 1.13 -$155.76 million ($2.77) -16.16
Medallion Financial $19.71 million 5.59 -$7.12 million $0.31 14.55

Medallion Financial has lower revenue, but higher earnings than Blackhawk Network. Blackhawk Network is trading at a lower price-to-earnings ratio than Medallion Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Blackhawk Network and Medallion Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Blackhawk Network -6.98% -18.94% -4.74%
Medallion Financial 1.41% -2.50% -1.08%

Insider and Institutional Ownership

96.3% of Blackhawk Network shares are held by institutional investors. Comparatively, 17.2% of Medallion Financial shares are held by institutional investors. 3.8% of Blackhawk Network shares are held by company insiders. Comparatively, 17.1% of Medallion Financial shares are held by company 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 recent ratings and recommmendations for Blackhawk Network and Medallion Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Blackhawk Network 0 11 2 0 2.15
Medallion Financial 0 1 1 0 2.50

Blackhawk Network currently has a consensus target price of $46.73, suggesting a potential upside of 4.41%. Medallion Financial has a consensus target price of $7.50, suggesting a potential upside of 66.30%. Given Medallion Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Medallion Financial is more favorable than Blackhawk Network.

Summary

Medallion Financial beats Blackhawk Network on 10 of the 13 factors compared between the two stocks.

About Blackhawk Network

Blackhawk Network Holdings, Inc. is a prepaid payment network. The Company operates through three segments: U.S. Retail, International, and Incentives & Rewards. The U.S. Retail segment is engaged in the sale of prepaid products to consumers at its retail distribution partners and online and the sale of telecom handsets to retail distribution partners for resale to consumers. Its Incentives & Rewards segment is engaged in the sale of prepaid products, software and services to its business clients. It distributes closed loop gift cards in categories, including digital media and e-commerce, dining, electronics, entertainment, fashion and travel. It distributes a range of prepaid wireless or cellular cards. It also provides reloads for reloadable prepaid products, including prepaid telecom accounts and general-purpose reloadable cards. Its incentives businesses provide software, consulting services, program management, reward processing and reward fulfillment to its business clients.

About Medallion Financial

Medallion Financial Corp. is a closed-end, non-diversified management investment company. The Company is a specialty finance company, which is engaged in originating, acquiring and servicing loans that finance taxicab medallions and various types of commercial businesses. The Company operates in lending and investing operations segment. It originates and services medallion, secured commercial, and consumer loans, and invests in both marketable and nonmarketable securities. The Company’s subsidiary, Medallion Bank, also originates consumer loans for the purchase of recreational vehicles, boats, motorcycles, trailers, and to finance small-scale home improvements. The Company also conducts business through its asset-based lending division, Medallion Business Credit, an originator of loans to small businesses for the purpose of financing inventory and receivables.

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