DLocal (NASDAQ:DLO – Get Free Report) and PagSeguro Digital (NYSE:PAGS – Get Free Report) are both mid-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.
Valuation and Earnings
This table compares DLocal and PagSeguro Digital”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| DLocal | $1.09 billion | 2.97 | $196.80 million | $0.63 | 17.48 |
| PagSeguro Digital | $20.57 billion | 0.12 | $379.40 million | $1.36 | 6.51 |
Insider and Institutional Ownership
90.1% of DLocal shares are owned by institutional investors. Comparatively, 45.9% of PagSeguro Digital shares are owned by institutional investors. 45.4% of DLocal shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
DLocal has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, PagSeguro Digital has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.
Profitability
This table compares DLocal and PagSeguro Digital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| DLocal | 15.85% | 42.15% | 15.38% |
| PagSeguro Digital | 10.40% | 16.44% | 3.29% |
Analyst Ratings
This is a breakdown of current ratings and price targets for DLocal and PagSeguro Digital, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| DLocal | 0 | 2 | 5 | 1 | 2.88 |
| PagSeguro Digital | 1 | 4 | 3 | 0 | 2.25 |
DLocal presently has a consensus price target of $16.63, suggesting a potential upside of 51.00%. PagSeguro Digital has a consensus price target of $12.00, suggesting a potential upside of 35.61%. Given DLocal’s stronger consensus rating and higher possible upside, analysts clearly believe DLocal is more favorable than PagSeguro Digital.
Summary
DLocal beats PagSeguro Digital on 11 of the 15 factors compared between the two stocks.
About DLocal
DLocal Limited operates a payment processing platform worldwide. The company offers pay-in solution which the business and get paid for their products and services through various payment methods, including international and local cards, online bank transfers and direct debit, cash, and alternative payment methods. It also provides pay-out solution used for merchants to scale pay-out operations. In addition, the company offers dLocal for Platforms, an end-to-end payment solution that offers a range of services to help platforms manage payments. It serves its products to commerce, streaming, ride-hailing, financial services, advertising, SaaS, travel, e-learning, on-demand delivery, and gaming and crypto industries. DLocal Limited was founded in 2016 and is headquartered in Montevideo, Uruguay.
About PagSeguro Digital
PagSeguro Digital Ltd., together with its subsidiaries, provides financial technology solutions and services for consumers, individual entrepreneurs, micro-merchants, and small and medium-sized companies in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, a digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; PagBank digital account, which offers payment and banking services through the PagBank mobile app, as well as centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem; and PlugPag, a tool for medium-sized and larger merchants that enables them to connect their point of sale (POS) device directly to their enterprise resource planning software or sales automation system through Bluetooth. It also offers cash-in solutions; online and in-person payment tools; and online gaming and cross-border digital services, as well as issues prepaid, credit, and cash cards. In addition, the company provides functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, POS app, i-Banking App, Super App, and e-commerce support and bill payment services; and PedeFácil, an order management and food delivery app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers. The company was founded in 2006 and is headquartered in São Paulo, Brazil.
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