Reviewing WEX (NYSE:WEX) and DLocal (NASDAQ:DLO)

WEX (NYSE:WEX) and DLocal (NASDAQ:DLO) are both mid-cap business services companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Risk & Volatility

WEX has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, DLocal has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Institutional and Insider Ownership

97.5% of WEX shares are held by institutional investors. Comparatively, 90.1% of DLocal shares are held by institutional investors. 1.4% of WEX shares are held by company insiders. Comparatively, 45.4% of DLocal shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for WEX and DLocal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WEX	0	10	4	0	2.29
DLocal	0	2	5	1	2.88

WEX presently has a consensus target price of $172.70, indicating a potential upside of 15.52%. DLocal has a consensus target price of $16.63, indicating a potential upside of 38.31%. Given DLocal’s stronger consensus rating and higher possible upside, analysts plainly believe DLocal is more favorable than WEX.

Profitability

This table compares WEX and DLocal’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%
DLocal	15.85%	41.22%	14.27%

Valuation & Earnings

This table compares WEX and DLocal”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WEX	$2.66 billion	1.95	$304.10 million	$8.91	16.78
DLocal	$1.09 billion	3.24	$196.80 million	$0.63	19.08

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

Summary

DLocal beats WEX on 10 of the 15 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 DLocal

DLocal Limited operates a payment processing platform worldwide. The company offers pay-in solution which the business and get paid for their products and services through various payment methods, including international and local cards, online bank transfers and direct debit, cash, and alternative payment methods. It also provides pay-out solution used for merchants to scale pay-out operations. In addition, the company offers dLocal for Platforms, an end-to-end payment solution that offers a range of services to help platforms manage payments. It serves its products to commerce, streaming, ride-hailing, financial services, advertising, SaaS, travel, e-learning, on-demand delivery, and gaming and crypto industries. DLocal Limited was founded in 2016 and is headquartered in Montevideo, Uruguay.