Analyzing Visa (NYSE:V) and CompoSecure (NASDAQ:CMPO)

Visa (NYSE:V) and CompoSecure (NASDAQ:CMPO) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Visa	0	4	20	6	3.07
CompoSecure	0	0	6	0	3.00

Visa currently has a consensus price target of $391.58, suggesting a potential upside of 17.87%. CompoSecure has a consensus price target of $25.50, suggesting a potential upside of 6.12%. Given Visa’s stronger consensus rating and higher possible upside, equities analysts plainly believe Visa is more favorable than CompoSecure.

Insider & Institutional Ownership

82.2% of Visa shares are held by institutional investors. Comparatively, 37.6% of CompoSecure shares are held by institutional investors. 0.1% of Visa shares are held by insiders. Comparatively, 52.1% of CompoSecure shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Visa	50.15%	60.31%	23.46%
CompoSecure	-24.53%	-65.50%	26.83%

Risk & Volatility

Visa has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, CompoSecure has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Valuation and Earnings

This table compares Visa and CompoSecure”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Visa	$40.00 billion	15.13	$20.06 billion	$10.21	32.54
CompoSecure	$160.68 million	18.90	-$53.72 million	($2.16)	-11.13

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

Summary

Visa beats CompoSecure on 11 of the 15 factors compared between the two stocks.

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.

About CompoSecure

CompoSecure, Inc. manufactures and designs metal, composite, and proprietary financial transaction cards in the United States and internationally. Its primary metal form factors include embedded, metal veneer lite, metal veneer, and full metal products. The company also offers Arculus Cold Storage Wallet, a three-factor authentication solution, which supports specific digital assets, including Bitcoin, Ethereum, non-fungible tokens and others. In addition, it offers Payments + Arculus Secure Authenticate, white-labeled cold storage wallet, Payments + Arculus Cold Storage, and Payments + Arculus Authentication + Arculus Cold Storage. The company serves financial institutions, plastic card manufacturers, system integrators, and security specialists. CompoSecure, Inc. was founded in 1910 and is based in Somerset, New Jersey.