Shift4 Payments (NYSE:FOUR) versus WEX (NYSE:WEX) Head-To-Head Analysis

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

Earnings and Valuation

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

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

WEX has lower revenue, but higher earnings 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Shift4 Payments and WEX, as provided by MarketBeat.

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

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

Volatility and Risk

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

Profitability

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

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

Insider and Institutional Ownership

98.9% of Shift4 Payments shares are owned by institutional investors. Comparatively, 97.5% of WEX shares are owned by institutional investors. 25.2% of Shift4 Payments shares are owned by insiders. Comparatively, 1.4% of WEX shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

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

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.

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.