Comparing Western Union (NYSE:WU) and Marqeta (NASDAQ:MQ)

Western Union (NYSE:WU) and Marqeta (NASDAQ:MQ) are both mid-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Profitability

This table compares Western Union and Marqeta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Union	18.80%	60.85%	6.97%
Marqeta	-6.74%	-4.22%	-2.88%

Risk and Volatility

Western Union has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Marqeta has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Insider & Institutional Ownership

91.8% of Western Union shares are held by institutional investors. Comparatively, 78.6% of Marqeta shares are held by institutional investors. 1.6% of Western Union shares are held by insiders. Comparatively, 12.6% of Marqeta shares are held 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.

Analyst Recommendations

This is a breakdown of current ratings for Western Union and Marqeta, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Union	4	10	0	0	1.71
Marqeta	2	6	1	1	2.10

Western Union presently has a consensus target price of $8.70, indicating a potential upside of 6.12%. Marqeta has a consensus target price of $5.50, indicating a potential upside of 19.18%. Given Marqeta’s stronger consensus rating and higher probable upside, analysts clearly believe Marqeta is more favorable than Western Union.

Earnings & Valuation

This table compares Western Union and Marqeta”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Union	$4.10 billion	0.64	$934.20 million	$2.29	3.58
Marqeta	$506.99 million	4.01	$27.29 million	($0.08)	-57.69

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

Summary

Western Union beats Marqeta on 8 of the 15 factors compared between the two stocks.

About Western Union

The Western Union Company provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices. The Consumer Services segments offers bill payment services, which facilitate payments for consumers, businesses, and other organizations, as well as money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets. The company was founded in 1851 and is headquartered in Denver, Colorado.

About Marqeta

Marqeta, Inc. operates a cloud-based open application programming interface platform that delivers card issuing and transaction processing services. It offers its solutions in various verticals, including financial services, on-demand services, expense management, and e-commerce enablement, as well as buy now, pay later. Marqeta, Inc. was incorporated in 2010 and is headquartered in Oakland, California.