Financial Survey: Paymentus (NYSE:PAY) vs. Western Union (NYSE:WU)

Western Union (NYSE:WU) and Paymentus (NYSE:PAY) are both mid-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a breakdown of recent recommendations for Western Union and Paymentus, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Union	5	10	0	0	1.67
Paymentus	0	4	3	1	2.63

Western Union currently has a consensus target price of $8.82, indicating a potential downside of 5.84%. Paymentus has a consensus target price of $35.33, indicating a potential upside of 42.87%. Given Paymentus’ stronger consensus rating and higher possible upside, analysts clearly believe Paymentus is more favorable than Western Union.

Institutional and Insider Ownership

91.8% of Western Union shares are owned by institutional investors. Comparatively, 78.4% of Paymentus shares are owned by institutional investors. 1.6% of Western Union shares are owned by company insiders. Comparatively, 87.8% of Paymentus shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Western Union and Paymentus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Union	12.33%	62.01%	7.09%
Paymentus	5.59%	13.24%	11.15%

Risk and Volatility

Western Union has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, Paymentus has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Earnings and Valuation

This table compares Western Union and Paymentus”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Union	$4.05 billion	0.72	$499.60 million	$1.52	6.16
Paymentus	$1.20 billion	2.59	$44.17 million	$0.46	53.76

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

Summary

Paymentus beats Western Union on 9 of the 15 factors compared between the two stocks.

About Western Union

The Western Union Company provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices. The Consumer Services segments offers bill payment services, which facilitate payments for consumers, businesses, and other organizations, as well as money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets. The company was founded in 1851 and is headquartered in Denver, Colorado.

About Paymentus

Paymentus Holdings, Inc. provides cloud-based bill payment technology and solutions in the United States and internationally. The company offers electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management to billers through a software-as-a-service technology platform. Its platform's payment processing includes credit cards, debit cards, eChecks, and digital wallets. It serves utility, financial service, government, insurance, telecommunication, real estate management, education, consumer finance, healthcare, and small business industries. The company was founded in 2004 and is headquartered in Charlotte, North Carolina.