Equitable (NYSE:EQH) vs. PayPal (NASDAQ:PYPL) Head to Head Comparison

PayPal (NASDAQ:PYPL) and Equitable (NYSE:EQH) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.

Volatility and Risk

PayPal has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Equitable has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Insider and Institutional Ownership

68.3% of PayPal shares are owned by institutional investors. Comparatively, 92.7% of Equitable shares are owned by institutional investors. 0.6% of PayPal shares are owned by insiders. Comparatively, 1.0% of Equitable shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for PayPal and Equitable, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PayPal	4	34	9	0	2.11
Equitable	1	2	10	1	2.79

PayPal presently has a consensus price target of $56.03, indicating a potential upside of 3.01%. Equitable has a consensus price target of $61.75, indicating a potential upside of 17.31%. Given Equitable’s stronger consensus rating and higher probable upside, analysts plainly believe Equitable is more favorable than PayPal.

Dividends

PayPal pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. Equitable pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. PayPal pays out 10.6% of its earnings in the form of a dividend. Equitable pays out -36.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Equitable has raised its dividend for 2 consecutive years. Equitable is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares PayPal and Equitable”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PayPal	$33.17 billion	1.40	$5.23 billion	$5.29	10.28
Equitable	$11.66 billion	1.23	-$1.38 billion	($3.31)	-15.90

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

Profitability

This table compares PayPal and Equitable’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PayPal	14.36%	24.39%	6.06%
Equitable	-8.72%	511.35%	0.61%

Summary

Equitable beats PayPal on 10 of the 18 factors compared between the two stocks.

About PayPal

PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, PayPal and Venmo branded credit products comprising its installment products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. The company provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.

About Equitable

Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, New York.