The following article is part of The Motley Fool's "Stock Madness 2005," a contest based loosely on the annual NCAA College Basketball Tournament, a.k.a. March Madness. From March 17 to April 4, our writers and analysts will engage in head-to-head competition with each other, advocating and arguing on behalf of 64 stocks we've selected as among the most interesting to Foolish investors. You, dear readers, are the fans and referees -- you'll read these exciting duels and then vote for the stock you think is the better investment... and should therefore move on to the next round of play. The company that survives six "games" will be our tournament champion, and its writer our most valuable "coach."

But, please, make no mistake -- "Stock Madness 2005" is a GAME!

Our writers are doing this for fun. They are enjoying the spirit of competition and the art of debate. They are delighting in the search for positives in the companies they've drawn... and negatives in the companies they're pitted against. They are NOT necessarily recommending these stocks as the ones they believe in above all others. As ever, YOU must decide whether the stocks we're writing about -- winners and losers -- are deserving of your investment dollars.

First Data (NYSE:FDC)
Denver , Colo.
52-week low-high: $38.50-$46.80
$32.2 billion market cap

By Nathan Slaughter

In name recognition alone, this matchup would have to favor my opponent. Marvel is a company widely known and loved by millions. I still have a few boxes of Marvel comic books gathering dust somewhere in my closet -- probably on top of my baseball cards. It seems to me, though, that the company has already captured the low-hanging box-office fruit. How many Spider-Mans and Fantastic Fours can be left in its arsenal?

The company has already largely cashed in on its most popular old-school characters, and it is unlikely that its second-tier franchises will be quite as powerful fighting real-world competition. So while Marvel will likely take the court as the sentimental favorite, Motley Fool Inside Value pick First Data will have to quiet the crowd by doing what is always does -- put plenty of points up on the scoreboard.

The company's three top scorers -- each league leaders at their respective positions -- are merchant processing, money transfer, and card issuing.

Have you been signing more debit or credit card receipts at McDonald's (NYSE:MCD) lately or know your card number by heart after repeated online transactions? Probably, and you are not alone. Consumers have grown increasingly fond of electronic payments, which have overtaken cash and checks as the most popular form of payment. No one stands to benefit from this sweeping trend more than First Data, which processes more than half of the nation's Visa and MasterCard credit and debit volume. In fact, according to Morningstar, the firm handles four times as much business as its nearest rival.

Aside from processing all those millions of in-store, online, and ATM transactions, First Data is also parent to Western Union -- the worldwide leader in providing money transfer and electronic bill payment services. Seven times every second someone uses Western Union to send money from one of the company's 220,000 (and growing) global locations.

The company's card-issuing division has been busy mailing out tens of millions of credit, debit, smart, and gift cards and currently has another 16 million waiting in the conversion pipeline.

So let's flip over to the back of the cards and see how First Data's "Fantastic Three" performed last year in some key offensive categories. Merchant processing reported revenue and operating income growth of 44% and 37% respectively, driven by a 64% increase in transactions. Western Union chipped in more than $1 billion in profits last year, on juicy margins of 33%. Finally, the card issuing segment posted a 64% jump in earnings, while converting more than 58 million cards.

Clearly, First Data had no trouble putting up an impressive triple-double.

Fool contributor Nathan Slaughter once ran into Shaq at a bachelor party in Baton Rouge but resisted the urge to challenge him to a slam-dunk contest. He owns none of the companies mentioned.

Marvel (NYSE:MVL)
New York, N.Y.
52-week low-high: $12.15-$21.95
$1.9 billion market cap

By Rick Aristotle Munarriz

Like one of its misunderstood superheroes Marvel spent way too many years of its young life trying to grasp the special powers that it was bestowed. Ahh, wasted youth! Yet now the same company that brought you Spider-Man, X-Men, and this summer's Fantastic Four has learned to use its licensing strengths for the greater good -- of its shareholders.

Its next heinous baddie to defeat? Apparently it's bank robber First Data. With both companies trading at similar earnings multiples (First Data at 18, Marvel at 17) we have to assess the long-term growth potential. First Data has been a great performer while we migrated toward becoming a cashless society but, hey, if fast-food chains are now taking plastic, I argue that we're already there. You've seen all that First Data's got. With Marvel, it's only the beginning.

Sure, Spider-Man and X-Men have been huge Marvel-licensed hits for the movie studios. The sequels will continue; Sony (NYSE:SNE) already has the third Spider-Man flick pegged for a 2007 release with X-Men just begging to have its franchise grow exponentially by spinning off its various warring mutants. Wolverine? Man, you're just getting warm. And if an originally obscure property like Blade was enough to generate a trilogy, what about the current Marvel movie deals that are being negotiated for Captain America, Thor, and Silver Surfer?

Comic books have proven to be fertile testing ground for celluloid success, and Marvel has literally hundreds of characters ready to bust out of the printed page. With every hit Marvel becomes more and more powerful. As Spider-Man's uncle once said, with great power comes great responsibility. These days Marvel is living by that adage.

It's not just film revenue. The renewed popularity has video game makers, toothbrush manufacturers, and snack packers hitting Marvel up for licensing rights. Fantastic Four should be good for a hit movie, $80 million in toy sales, and an animated series for kids next year. Stacking revenue stream on top of revenue stream? That's this Motley Fool Stock Advisor recommendation's superhero power, and you can just feel it busting out of today's wardrobe.

Longtime contributor Rick Munarriz does not own shares in any of the companies mentioned in this story, though he is still trying to come to grips with his power of simpleton telekinesis.

may have hundreds of characters at its disposal, but I just don't think the adventures of Ant-Man will hold quite the same appeal as Spider-Man did. Conversely, as solid as First Data's recent play has been, the company is expecting even better performance going forward -- with double-digit revenue growth and enough recurring free cash flow pouring in to support a recent tripling of the company's dividend and another $2 billion to the current stock repurchase program. -- N.S.

Low-lying fruit, Nathan? Who could have predicted that Hulk would stumble at the box office while Blade would be good enough for a trilogy? That's why you have to love the fact that Marvel has hundreds of characters with just a handful played so far. Marvel's got juicy ripe fruit all over the tree, man. First Data? Great consistent player, but after 2004 it already picked the growth tree dry. -- R.A.M.

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