Visa (NYSE:V) and BSQUARE (NASDAQ:BSQR) are both business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Profitability

This table compares Visa and BSQUARE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Visa 50.61% 39.32% 16.07%
BSQUARE -18.71% -41.17% -25.68%

Volatility & Risk

Visa has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, BSQUARE has a beta of 1.97, meaning that its share price is 97% more volatile than the S&P 500.

Valuation and Earnings

This table compares Visa and BSQUARE’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Visa $20.61 billion 15.73 $10.30 billion $4.61 35.03
BSQUARE $73.41 million 0.33 -$13.74 million N/A N/A

Visa has higher revenue and earnings than BSQUARE.

Insider & Institutional Ownership

80.9% of Visa shares are held by institutional investors. Comparatively, 22.3% of BSQUARE shares are held by institutional investors. 0.2% of Visa shares are held by insiders. Comparatively, 11.0% of BSQUARE shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Visa pays an annual dividend of $1.00 per share and has a dividend yield of 0.6%. BSQUARE does not pay a dividend. Visa pays out 21.7% of its earnings in the form of a dividend. Visa has increased its dividend for 10 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Visa and BSQUARE, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Visa 0 1 23 0 2.96
BSQUARE 0 0 0 0 N/A

Visa presently has a consensus target price of $169.75, indicating a potential upside of 5.11%. Given Visa’s higher probable upside, equities analysts plainly believe Visa is more favorable than BSQUARE.

Summary

Visa beats BSQUARE on 11 of the 14 factors compared between the two stocks.

Visa Company Profile

Visa Inc. operates as a payments technology company worldwide. The company facilitates commerce through the transfer of value and information among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a processing network that enables authorization, clearing, and settlement of payment transactions; and offers fraud protection for account holders and assured payment for merchants. In addition, the company offers card products, as well as value-added services. It provides its services under the Visa, Visa Electron, Interlink, V PAY, and PLUS brands. Visa Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

BSQUARE Company Profile

BSQUARE Corporation provides software solutions and related engineering services to businesses that develop, market, and sell standalone intelligent systems in North America, Europe, and Asia. The company offers DataV software solution, which addresses various business use cases specific to Industrial Internet of Things (IIoT) applications, including predictive failure, adaptive diagnostics, and IIoT device management. Its DataV solution is used in various industrial sectors and vertical markets, such as commercial transportation, oil and gas extraction, manufacturing, water and power, and other vertical markets. The company's software products also include HTML5 Rendering Engine; and TestQuest 10, a software testing automation tool. It serves original equipment manufacturers, original design manufacturers, corporate enterprises, silicon vendors, and peripheral vendors. BSQUARE Corporation was founded in 1994 and is headquartered in Bellevue, Washington.

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