Contrasting Block (NYSE:XYZ) and Visa (NYSE:V)

Block (NYSE:XYZ) and Visa (NYSE:V) are both large-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Block	1.43%	8.10%	4.53%
Visa	50.78%	67.68%	25.45%

Earnings & Valuation

This table compares Block and Visa”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Block	$25.04 billion	1.83	$1.31 billion	$0.56	136.18
Visa	$40.00 billion	16.39	$20.06 billion	$11.76	31.23

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Block and Visa, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Block	0	9	29	4	2.88
Visa	0	0	24	7	3.23

Block presently has a consensus target price of $95.42, indicating a potential upside of 25.13%. Visa has a consensus target price of $416.62, indicating a potential upside of 13.42%. Given Block’s higher probable upside, analysts plainly believe Block is more favorable than Visa.

Insider & Institutional Ownership

70.4% of Block shares are owned by institutional investors. Comparatively, 82.2% of Visa shares are owned by institutional investors. 11.4% of Block shares are owned by company insiders. Comparatively, 0.1% of Visa shares are owned by company 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.

Risk & Volatility

Block has a beta of 2.52, indicating that its share price is 152% more volatile than the S&P 500. Comparatively, Visa has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Summary

Visa beats Block on 10 of the 15 factors compared between the two stocks.

About Block

Square, Inc. provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data. Square, Inc. was founded in 2009 and is headquartered in San Francisco, California.

About Visa

Visa Inc. operates as a payment technology company in the United States and internationally. The company operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions. It also offers credit, debit, and prepaid card products; tap to pay, tokenization, and click to pay services; Visa Direct, a solution that facilitates the delivery of funds to eligible cards, deposit accounts, and digital wallets; Visa B2B Connect, a multilateral business-to-business cross-border payments network; Visa Cross-Border Solution, a cross-border consumer payments solution; and Visa DPS that provides a range of value-added services, including fraud mitigation, dispute management, data analytics, campaign management, a suite of digital solutions, and contact center services. The company also provides acceptance solutions, which include Cybersource that provides modular and value-added services for connecting merchants to payment processing; risk and identity solutions, such as Visa Advanced Authorization, Visa Secure, Visa Risk and Decision Manager, Visa Consumer Authentication Service, and payment-decisioning solutions for fraud prevention; and Visa Consulting and Analytics, a payment consulting advisory services. It provides its services under the Visa, Visa Electron, Interlink, V PAY, and PLUS brand names. The company serves merchants, financial institutions, and government entities. Visa Inc. was founded in 1958 and is headquartered in San Francisco, California.