Head-To-Head Survey: XP (XP) & Its Peers

XP (NASDAQ:XP) is one of 1,743 public companies in the “Capital Markets” industry, but how does it compare to its peers? We will compare XP to similar companies based on the strength of its analyst recommendations, valuation, institutional ownership, risk, earnings, profitability and dividends.

Volatility and Risk

XP has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500. Comparatively, XP’s peers have a beta of 0.79, suggesting that their average stock price is 21% less volatile than the S&P 500.

Earnings and Valuation

This table compares XP and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
XP	$3.30 billion	$925.91 million	7.93
XP Competitors	$5.22 billion	$398.52 million	17.85

XP’s peers have higher revenue, but lower earnings than XP. XP is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

XP pays an annual dividend of $0.40 per share and has a dividend yield of 2.6%. XP pays out 20.9% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 29.1% of their earnings in the form of a dividend.

Profitability

This table compares XP and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
XP	27.20%	22.19%	1.33%
XP Competitors	318.24%	11.44%	3.69%

Insider and Institutional Ownership

59.2% of XP shares are held by institutional investors. Comparatively, 30.5% of shares of all “Capital Markets” companies are held by institutional investors. 13.1% of shares of all “Capital Markets” companies 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.

Analyst Recommendations

This is a summary of current ratings and price targets for XP and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
XP	0	5	4	0	2.44
XP Competitors	5560	20138	22478	642	2.37

XP presently has a consensus price target of $23.83, indicating a potential upside of 57.42%. As a group, “Capital Markets” companies have a potential upside of 26.41%. Given XP’s stronger consensus rating and higher probable upside, equities research analysts plainly believe XP is more favorable than its peers.

Summary

XP peers beat XP on 8 of the 15 factors compared.

About XP

XP Inc. provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients. The company also offers XP Educação, an online financial education portal that offers seminars, classes, and learning tools to help teach individuals on topics, such as basics of investing, techniques, and investment strategies, as well as insurance brokerage services. In addition, it operates XP Platform, an open product platform that provides clients to access investment products in the market, including equity and fixed income securities, mutual and hedge funds, structured products, life insurance, pension plans, real-estate investment funds, and others. The company was founded in 2001 and is based in São Paulo, Brazil.