StoneCo (NASDAQ:STNE – Get Free Report) and Finance of America Companies (NYSE:FOA – Get Free Report) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, risk and dividends.
Profitability
This table compares StoneCo and Finance of America Companies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| StoneCo | 22.92% | 22.19% | 4.10% |
| Finance of America Companies | -0.10% | 28.39% | 0.35% |
Analyst Ratings
This is a breakdown of recent recommendations and price targets for StoneCo and Finance of America Companies, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| StoneCo | 0 | 6 | 4 | 0 | 2.40 |
| Finance of America Companies | 2 | 1 | 2 | 0 | 2.00 |
StoneCo presently has a consensus target price of $14.30, indicating a potential upside of 26.77%. Finance of America Companies has a consensus target price of $30.50, indicating a potential upside of 177.02%. Given Finance of America Companies’ higher probable upside, analysts plainly believe Finance of America Companies is more favorable than StoneCo.
Insider & Institutional Ownership
73.2% of StoneCo shares are held by institutional investors. Comparatively, 97.2% of Finance of America Companies shares are held by institutional investors. 35.4% of Finance of America Companies shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Volatility and Risk
StoneCo has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500. Comparatively, Finance of America Companies has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.
Earnings & Valuation
This table compares StoneCo and Finance of America Companies”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| StoneCo | $2.53 billion | 1.11 | $425.73 million | $2.48 | 4.55 |
| Finance of America Companies | $497.43 million | 0.38 | $45.24 million | ($3.01) | -3.66 |
StoneCo has higher revenue and earnings than Finance of America Companies. Finance of America Companies is trading at a lower price-to-earnings ratio than StoneCo, indicating that it is currently the more affordable of the two stocks.
Summary
StoneCo beats Finance of America Companies on 9 of the 13 factors compared between the two stocks.
About StoneCo
StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team. The company served small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands.
About Finance of America Companies
Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.
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