Critical Review: Corpay (NYSE:CPAY) & WEX (NYSE:WEX)

WEX (NYSE:WEX) and Corpay (NYSE:CPAY) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Valuation & Earnings

This table compares WEX and Corpay”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WEX	$2.62 billion	1.79	$309.60 million	$7.69	17.80
Corpay	$4.31 billion	4.52	$1.00 billion	$14.73	18.90

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

Institutional and Insider Ownership

97.5% of WEX shares are owned by institutional investors. Comparatively, 98.8% of Corpay shares are owned by institutional investors. 1.4% of WEX shares are owned by company insiders. Comparatively, 5.0% of Corpay shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares WEX and Corpay’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WEX	10.81%	45.36%	3.54%
Corpay	25.17%	39.13%	7.20%

Analyst Recommendations

This is a summary of current ratings for WEX and Corpay, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WEX	0	12	4	0	2.25
Corpay	0	6	9	0	2.60

WEX presently has a consensus target price of $172.92, suggesting a potential upside of 26.29%. Corpay has a consensus target price of $379.71, suggesting a potential upside of 36.36%. Given Corpay’s stronger consensus rating and higher possible upside, analysts clearly believe Corpay is more favorable than WEX.

Volatility and Risk

WEX has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, Corpay has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.

Summary

Corpay beats WEX on 12 of the 14 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 Corpay

Corpay, Inc. operates as a payments company that helps businesses and consumers manage vehicle-related expenses, lodging expenses, and corporate payments in the United States, Brazil, the United Kingdom, and internationally. The company offers vehicle payment solutions, which include fuel, tolls, parking, fleet maintenance, and long-haul transportation services, as well as prepaid food and transportation vouchers and cards. It also provides corporate payment solutions consisting of accounts payable automation; virtual cards, cross-border solutions; and purchasing and travel and entertainment card products, as well as lodging payments solutions for employees who travel overnight for work purposes; traveling crews and stranded passengers from airlines and cruise lines; and insurance policyholders displaced from their homes due to damage or catastrophe. In addition, the company offers gifts and payroll cards. It serves business, merchant, consumer, and payment network customers. The company was formerly known as FLEETCOR Technologies, Inc. and changed its name to Corpay, Inc. in March 2024. Corpay, Inc. was founded in 1986 and is headquartered in Atlanta, Georgia.