Waton Financial (NASDAQ:WTF – Get Free Report) and XP (NASDAQ:XP – Get Free Report) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Waton Financial and XP, as provided by MarketBeat.com.
| 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 43.90%. Given XP’s stronger consensus rating and higher probable upside, analysts clearly believe XP is more favorable than Waton Financial.
Institutional & Insider Ownership
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% |
Volatility & Risk
Waton Financial has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, XP has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.
Valuation and Earnings
This table compares Waton Financial and XP”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Waton Financial | $7.45 million | 16.29 | -$11.97 million | N/A | N/A |
| XP | $3.30 billion | 2.58 | $925.91 million | $1.81 | 8.73 |
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.
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