Mimecast Limited (NASDAQ: MIME) and Visa (NYSE:V) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitabiliy, valuation and analyst recommendations.

Risk & Volatility

Mimecast Limited has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Visa has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Institutional & Insider Ownership

48.0% of Mimecast Limited shares are owned by institutional investors. Comparatively, 82.5% of Visa shares are owned by institutional investors. 0.1% of Visa shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Mimecast Limited and Visa’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mimecast Limited $186.56 million 8.52 $2.15 million ($0.10) -281.87
Visa $17.76 billion 13.07 $12.17 billion $2.69 37.73

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

Dividends

Visa pays an annual dividend of $0.66 per share and has a dividend yield of 0.7%. Mimecast Limited does not pay a dividend. Visa pays out 24.5% of its earnings in the form of a dividend. Mimecast Limited has increased its dividend for 8 consecutive years.

Profitability

This table compares Mimecast Limited and Visa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mimecast Limited -2.92% -6.82% -2.90%
Visa 36.53% 30.95% 12.74%

Analyst Ratings

This is a breakdown of current ratings and price targets for Mimecast Limited and Visa, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mimecast Limited 0 1 12 0 2.92
Visa 0 3 24 1 2.93

Mimecast Limited presently has a consensus price target of $29.18, suggesting a potential upside of 3.52%. Visa has a consensus price target of $104.73, suggesting a potential upside of 3.19%. Given Mimecast Limited’s higher possible upside, analysts clearly believe Mimecast Limited is more favorable than Visa.

Summary

Visa beats Mimecast Limited on 14 of the 17 factors compared between the two stocks.

About Mimecast Limited

Mimecast Limited is a provider of cloud security and risk management services for corporate information and e-mail. The Company’s suite of cloud services protects customers from the business and data security risks. It also mitigates the business disruption that e-mail failure or downtime causes. In addition, its archiving services secure, store and manage critical corporate communications and information to address the compliance and e-discovery requirements. It has developed its cloud architecture to offer customers e-mail security, continuity and archiving capabilities in a single service. It has developed an operating system (OS) called Mime OS for native cloud services. It protects inbound and outbound e-mail from malware, spam, threats, e-mail denial of service (DoS) and distributed denial of service (DDoS), data leaks and other security threats. It also offers service bundles, and Mimecast mobile and desktop applications.

About Visa

Visa Inc. (Visa) is a payments technology company that connects consumers, merchants, financial institutions, businesses, strategic partners and government entities to electronic payments. The Company operates through payment services segment. The Company enables global commerce through the transfer of value and information among the participants. The Company’s transaction processing network facilitates authorization, clearing and settlement of payment transactions and enables to provide its financial institution and merchant clients a range of products, platforms and value-added services. The Company is a retail electronic payment network based on payments volume, number of transactions and number of cards in circulation. Its products/services include core products, processing infrastructure, transaction processing services, digital products, merchant products, and risk products and payment security initiatives.

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