Head to Head Contrast: Green Dot (NYSE:GDOT) versus WEX (NYSE:WEX)

WEX (NYSE:WEX) and Green Dot (NYSE:GDOT) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for WEX and Green Dot, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WEX	0	12	4	0	2.25
Green Dot	2	4	1	0	1.86

WEX presently has a consensus price target of $169.27, indicating a potential upside of 15.01%. Green Dot has a consensus price target of $13.56, indicating a potential upside of 8.57%. Given WEX’s stronger consensus rating and higher possible upside, analysts clearly believe WEX is more favorable than Green Dot.

Insider and Institutional Ownership

97.5% of WEX shares are held by institutional investors. Comparatively, 92.6% of Green Dot shares are held by institutional investors. 1.4% of WEX shares are held by insiders. Comparatively, 1.4% of Green Dot shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

WEX has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Green Dot has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Valuation & Earnings

This table compares WEX and Green Dot”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WEX	$2.66 billion	1.92	$304.10 million	$8.91	16.52
Green Dot	$2.08 billion	0.33	-$98.87 million	($1.78)	-7.02

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

Profitability

This table compares WEX and Green Dot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WEX	11.50%	42.66%	3.33%
Green Dot	-4.75%	6.93%	1.10%

Summary

WEX beats Green Dot on 13 of the 13 factors compared between the two stocks.

About WEX

WEX Inc. operates a commerce platform in the United States and internationally. The Mobility segment offers fleet vehicle payment solutions, transaction processing, and information management services; and provides account activation and account retention services; authorization and billing inquiries, and account maintenance services; account management; credit and collections services; merchant services; analytics solutions; and ancillary services and offerings. This segment markets its products directly and indirectly to businesses and government agencies with fleets of commercial vehicles; and indirectly through co-branded and private label relationships. The Corporate Payments segment provides payment solutions, including embedded payments; and accounts payable automation and spend management solutions. This segment also markets its products directly and indirectly to customers in travel, fintech, insurance, consumer bill pay, and media verticals. The Benefits Solutions segment offers software-as-a-service (SaaS) platform for consumer directed healthcare benefits and full-service benefit enrollment solutions. In addition, its SaaS platform includes embedded payment solutions and plan administration services for consumer-directed health benefits; COBRA accounts; and benefit enrollment and administration services. Further, it offers custodial and depository services for health savings accounts; and markets its products through third-party administrators, financial institutions, payroll providers, and health plans. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is based in Portland, Maine.

About Green Dot

Green Dot Corporation, a financial technology and registered bank holding company, provides various financial services to consumers and businesses in the United States. It operates through three segments: Consumer Services, Business to Business Services, and Money Movement Services. The company provides deposit account programs, including consumer and small business checking account products, network-branded reloadable prepaid debit cards and gift cards, and secured credit programs. It offers money processing services, such as cash transfer services that enable consumers to deposit or pick up cash and pay bills with cash at the point-of-sale at any participating retailer; and simply paid disbursement services, which enable wages and authorized funds disbursement to its deposit account programs and accounts issued by any third-party bank or program manager. In addition, the company offers tax processing services comprising tax refund transfers, which provide the processing technology to facilitate receipt of a taxpayers' refund proceeds; small business lending to independent tax preparation providers that seek small advances; and fast cash advance, a loan that enables tax refund recipients. Green Dot Corporation was incorporated in 1999 and is headquartered in Austin, Texas.