Neostellar Capital (NASDAQ:NSLR – Get Free Report) and PayPal (NASDAQ:PYPL – Get Free Report) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.
Analyst Ratings
This is a summary of current ratings and recommmendations for Neostellar Capital and PayPal, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Neostellar Capital | 0 | 1 | 4 | 1 | 3.00 |
| PayPal | 5 | 33 | 9 | 0 | 2.09 |
Neostellar Capital currently has a consensus price target of $14.25, indicating a potential upside of 122.66%. PayPal has a consensus price target of $56.28, indicating a potential downside of 0.74%. Given Neostellar Capital’s stronger consensus rating and higher probable upside, equities analysts clearly believe Neostellar Capital is more favorable than PayPal.
Volatility & Risk
Neostellar Capital has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500. Comparatively, PayPal has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.
Dividends
Neostellar Capital pays an annual dividend of $0.25 per share and has a dividend yield of 3.9%. PayPal pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. Neostellar Capital pays out 6.2% of its earnings in the form of a dividend. PayPal pays out 10.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Neostellar Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation and Earnings
This table compares Neostellar Capital and PayPal”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Neostellar Capital | $1.69 million | 100.24 | $48.81 million | $4.03 | 1.59 |
| PayPal | $34.13 billion | 1.42 | $5.23 billion | $5.29 | 10.72 |
PayPal has higher revenue and earnings than Neostellar Capital. Neostellar Capital is trading at a lower price-to-earnings ratio than PayPal, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
13.0% of Neostellar Capital shares are owned by institutional investors. Comparatively, 68.3% of PayPal shares are owned by institutional investors. 8.3% of Neostellar Capital shares are owned by insiders. Comparatively, 0.6% of PayPal shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Neostellar Capital and PayPal’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Neostellar Capital | 6,053.56% | -12.63% | -10.14% |
| PayPal | 14.36% | 24.39% | 6.06% |
Summary
Neostellar Capital beats PayPal on 9 of the 17 factors compared between the two stocks.
About Neostellar Capital
SuRo Capital Corp. is a business development company. The firm seeks to invest in growing, late stage, venture capital-backed private companies. SuRo Capital Corp. was founded in 2010 and is based in San Francisco, California.
About PayPal
PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, PayPal and Venmo branded credit products comprising its installment products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. The company provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.
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