Contrasting Waton Financial (NASDAQ:WTF) & XP (NASDAQ:XP)

Waton Financial (NASDAQ:WTF) and XP (NASDAQ:XP) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.

Risk and Volatility

Waton Financial has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, XP has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Waton Financial and XP, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waton Financial	1	0	0	0	1.00
XP	0	3	3	0	2.50

XP has a consensus target price of $22.75, suggesting a potential upside of 47.54%. Given XP’s stronger consensus rating and higher possible upside, analysts plainly believe XP is more favorable than Waton Financial.

Institutional and Insider Ownership

59.2% of XP shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Waton Financial and XP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waton Financial	N/A	N/A	N/A
XP	27.40%	22.51%	1.34%

Earnings & Valuation

This table compares Waton Financial and XP”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waton Financial	$7.45 million	18.52	-$11.97 million	N/A	N/A
XP	$8.25 billion	1.00	$925.91 million	$1.81	8.52

XP has higher revenue and earnings than Waton Financial.

Summary

XP beats Waton Financial on 9 of the 11 factors compared between the two stocks.

About Waton Financial

Waton Financial Ltd. is a holding company, which engages in the provision of securities brokerage and financial technology services. It is also involved in software licensing and related support services including the licensing of trading platform app, upgrades and enhancements, maintenance, and other related services to financial institutions. The company was founded on June 25, 2010 and is headquartered in Hong Kong.

About XP

XP Inc. provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients. The company also offers XP Educação, an online financial education portal that offers seminars, classes, and learning tools to help teach individuals on topics, such as basics of investing, techniques, and investment strategies, as well as insurance brokerage services. In addition, it operates XP Platform, an open product platform that provides clients to access investment products in the market, including equity and fixed income securities, mutual and hedge funds, structured products, life insurance, pension plans, real-estate investment funds, and others. The company was founded in 2001 and is based in São Paulo, Brazil.