Comparing WEX (NYSE:WEX) and Shift4 Payments (NYSE:FOUR)

WEX (NYSE:WEX) and Shift4 Payments (NYSE:FOUR) are both mid-cap business services companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Institutional & Insider Ownership

97.5% of WEX shares are held by institutional investors. Comparatively, 98.9% of Shift4 Payments shares are held by institutional investors. 1.4% of WEX shares are held by insiders. Comparatively, 25.2% of Shift4 Payments shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares WEX and Shift4 Payments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WEX	11.43%	48.01%	3.46%
Shift4 Payments	5.02%	40.19%	6.61%

Earnings & Valuation

This table compares WEX and Shift4 Payments”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WEX	$2.66 billion	2.03	$304.10 million	$8.50	18.50
Shift4 Payments	$3.88 billion	1.34	$229.60 million	$2.13	27.46

WEX has higher earnings, but lower revenue than Shift4 Payments. WEX is trading at a lower price-to-earnings ratio than Shift4 Payments, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

WEX has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Shift4 Payments has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for WEX and Shift4 Payments, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WEX	0	12	3	0	2.20
Shift4 Payments	0	7	13	1	2.71

WEX currently has a consensus price target of $162.27, suggesting a potential upside of 3.21%. Shift4 Payments has a consensus price target of $90.26, suggesting a potential upside of 54.30%. Given Shift4 Payments’ stronger consensus rating and higher probable upside, analysts clearly believe Shift4 Payments is more favorable than WEX.

Summary

Shift4 Payments beats WEX on 10 of the 15 factors compared between the two stocks.

About WEX

WEX Inc. operates a commerce platform in the United States and internationally. The Mobility segment offers fleet vehicle payment solutions, transaction processing, and information management services; and provides account activation and account retention services; authorization and billing inquiries, and account maintenance services; account management; credit and collections services; merchant services; analytics solutions; and ancillary services and offerings. This segment markets its products directly and indirectly to businesses and government agencies with fleets of commercial vehicles; and indirectly through co-branded and private label relationships. The Corporate Payments segment provides payment solutions, including embedded payments; and accounts payable automation and spend management solutions. This segment also markets its products directly and indirectly to customers in travel, fintech, insurance, consumer bill pay, and media verticals. The Benefits Solutions segment offers software-as-a-service (SaaS) platform for consumer directed healthcare benefits and full-service benefit enrollment solutions. In addition, its SaaS platform includes embedded payment solutions and plan administration services for consumer-directed health benefits; COBRA accounts; and benefit enrollment and administration services. Further, it offers custodial and depository services for health savings accounts; and markets its products through third-party administrators, financial institutions, payroll providers, and health plans. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is based in Portland, Maine.

About Shift4 Payments

Shift4 Payments, Inc. (NYSE FOUR) provides integrated payment processing and technology solutions in the United States. Its payments platform provides omni-channel card acceptance and processing solutions, including end-to-end payment processing for various payment types; merchant acquiring; proprietary omni-channel gateway; complementary software integrations; integrated and mobile point-of-sale (POS) solutions; security and risk management solutions; and reporting and analytical tools, as well as tokenization, risk management/underwriting, payment device and chargeback management, fraud prevention, and gift card solutions. The company also offers suite of technology solutions, such as Lighthouse, a cloud-based business intelligence tool that includes customer engagement, social media management, online reputation management, scheduling, and product pricing, as well as reporting and analytics; integrated POS for merchants business; and Skytab, a mobile payment solution. In addition, it provides marketplace technology that enable seamless integrations into third-party applications, which includes online delivery services, payroll, timekeeping, and other human resource services. Further, the company offers merchant management, training and education, marketing management, and incentives tracking solutions. Additionally, it provides merchant underwriting, onboarding and activation, training, risk management, and support services; and software integrations and compliance management, and partner support and services. The company was founded in 1998 and is headquartered in Allentown, Pennsylvania.