Contrasting Western Union (NYSE:WU) and CompoSecure (NASDAQ:CMPO)

CompoSecure (NASDAQ:CMPO) and Western Union (NYSE:WU) are both mid-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for CompoSecure and Western Union, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CompoSecure	0	1	6	0	2.86
Western Union	4	10	0	0	1.71

CompoSecure currently has a consensus price target of $25.17, suggesting a potential upside of 29.46%. Western Union has a consensus price target of $8.70, suggesting a potential upside of 0.17%. Given CompoSecure’s stronger consensus rating and higher possible upside, equities analysts clearly believe CompoSecure is more favorable than Western Union.

Volatility and Risk

CompoSecure has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Western Union has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Institutional and Insider Ownership

37.6% of CompoSecure shares are owned by institutional investors. Comparatively, 91.8% of Western Union shares are owned by institutional investors. 52.1% of CompoSecure shares are owned by insiders. Comparatively, 1.6% of Western Union shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares CompoSecure and Western Union”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CompoSecure	$267.82 million	9.09	-$53.72 million	($2.16)	-9.00
Western Union	$4.10 billion	0.67	$934.20 million	$2.29	3.79

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CompoSecure	-24.53%	-65.50%	26.83%
Western Union	18.80%	60.85%	6.97%

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.

About Western Union

The Western Union Company provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices. The Consumer Services segments offers bill payment services, which facilitate payments for consumers, businesses, and other organizations, as well as money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets. The company was founded in 1851 and is headquartered in Denver, Colorado.