Contrasting Rocket Companies (NYSE:RKT) and Visa (NYSE:V)

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

Volatility and Risk

Rocket Companies has a beta of 2.23, indicating that its share price is 123% more volatile than the S&P 500. Comparatively, Visa has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rocket Companies	4.70%	5.13%	1.88%
Visa	50.78%	67.68%	25.45%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocket Companies	$6.70 billion	5.07	-$68.00 million	$0.14	85.56
Visa	$40.00 billion	16.06	$20.06 billion	$11.76	30.61

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

Analyst Recommendations

This is a summary of recent ratings and target prices for Rocket Companies and Visa, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocket Companies	0	9	9	0	2.50
Visa	0	0	34	3	3.08

Rocket Companies presently has a consensus price target of $19.57, indicating a potential upside of 63.38%. Visa has a consensus price target of $425.21, indicating a potential upside of 18.13%. Given Rocket Companies’ higher possible upside, analysts clearly believe Rocket Companies is more favorable than Visa.

Insider & Institutional Ownership

4.6% of Rocket Companies shares are held by institutional investors. Comparatively, 82.2% of Visa shares are held by institutional investors. 57.7% of Rocket Companies shares are held by insiders. Comparatively, 0.1% of Visa shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

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

About Rocket Companies

Rocket Companies, Inc., a fintech holding company, provides mortgage lending, title and settlement services, and other financial technology services in the United States and Canada. It operates through two segments, Direct to Consumer and Partner Network. The company’s solutions include Rocket Mortgage, a mortgage lender; Amrock that provides title insurance, property valuation, and settlement services; Rocket Homes, a home search platform and real estate agent referral network, which offers technology-enabled services to support the home buying and selling experience; and Rocket Loans, an online-based personal loans business. It also offers Core Digital Media, a online marketing platform in the mortgage and personal financial product sectors; Rocket Money, a personal finance app that helps clients manage every aspect of their financial lives; Lendesk, a software services company that provides a point of sale system for mortgage professionals and a loan origination system for private lenders; Rock Connections, a sales and support platform specializing in contact center services; and Rocket Innovation Studio that recruits and mentors top technology talent. In addition, the company originates, closes, sells, and services agency-conforming loans. Rocket Companies, Inc. was founded in 1985 and is headquartered in Detroit, Michigan. The company operates as a subsidiary of Rock Holdings Inc.

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.