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

Earnings and Valuation

This table compares Etsy and Visa’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Etsy $441.23 million 11.89 $81.80 million $0.38 115.32
Visa $18.36 billion 15.73 $6.70 billion $3.48 40.80

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

Profitability

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

Net Margins Return on Equity Return on Assets
Etsy 17.52% 13.23% 6.81%
Visa 47.91% 36.09% 14.79%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Etsy and Visa, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Etsy 1 4 6 0 2.45
Visa 0 2 29 0 2.94

Etsy currently has a consensus price target of $44.68, suggesting a potential upside of 2.32%. Visa has a consensus price target of $154.13, suggesting a potential upside of 8.58%. Given Visa’s stronger consensus rating and higher probable upside, analysts clearly believe Visa is more favorable than Etsy.

Insider and Institutional Ownership

86.8% of Etsy shares are owned by institutional investors. Comparatively, 80.3% of Visa shares are owned by institutional investors. 2.8% of Etsy shares are owned by insiders. Comparatively, 0.1% of Visa shares are owned 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.

Dividends

Visa pays an annual dividend of $0.84 per share and has a dividend yield of 0.6%. Etsy does not pay a dividend. Visa pays out 24.1% of its earnings in the form of a dividend. Visa has raised its dividend for 9 consecutive years.

Risk & Volatility

Etsy has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, Visa has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Summary

Visa beats Etsy on 13 of the 17 factors compared between the two stocks.

About Etsy

Etsy, Inc. operates Etsy.com, a commerce platform to make, sell, and buy goods online and offline primarily in the United States, United Kingdom, Canada, Australia, France, and Germany. It provides various seller services and tools that are designed to help entrepreneurs for starting, managing, and scaling their businesses. The company offers approximately 50 million items across approximately 50 retail categories to buyers. It also provides various seller services, including Etsy payments, a payment processing service; promoted listings, an on-site advertising service that allows sellers to pay for prominent placement of their listings in search results; shipping labels, which allows sellers in the United States and Canada to purchase discounted shipping labels; and pattern, a service that allows sellers to build custom Websites, as well as offers seller tools and education resources to manage the administrative side of their businesses. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.

About Visa

Visa Inc. operates as a payments technology company worldwide. The company facilitates commerce through the transfer of value and information among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a processing network that enables authorization, clearing, and settlement of payment transactions; and offers fraud protection for account holders and assured payment for merchants. The company also offers gateway services for merchants to accept, process, and reconcile payments; manage fraud; and safeguard payment security online, as well as processing services for participating issuers of visa debit, prepaid, and ATM payment products. In addition, it provides digital products, including Visa Checkout that offers consumers an expedited, and secure payment experience for online transactions; and Visa Direct, a push payment product platform, that allows businesses, governments, and consumers to use the Visa network to transfer funds from an originating account to another via a debit, prepaid, or credit card number, as well as Visa token service that replaces the card account numbers from the transaction with a token. Further the company offers corporate (travel) and purchasing card products, as well as value-added services. It provides its services under the Visa, Visa Electron, Interlink, V PAY, and PLUS brands. Visa Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

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