Analyzing PagSeguro Digital (NYSE:PAGS) and SciPlay (NASDAQ:SCPL)


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SciPlay (NASDAQ:SCPL) and PagSeguro Digital (NYSE:PAGS) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Valuation and Earnings

This table compares SciPlay and PagSeguro Digital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SciPlay $465.80 million 4.69 $32.40 million $1.53 11.30
PagSeguro Digital $1.39 billion 11.08 $346.04 million $1.08 43.40

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

Profitability

This table compares SciPlay and PagSeguro Digital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SciPlay 3.81% 7.36% 5.50%
PagSeguro Digital 21.01% 8.33% 8.95%

Institutional & Insider Ownership

15.9% of SciPlay shares are held by institutional investors. Comparatively, 58.5% of PagSeguro Digital shares are held by institutional investors. 0.2% of SciPlay shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

SciPlay has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, PagSeguro Digital has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for SciPlay and PagSeguro Digital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SciPlay 1 4 5 0 2.40
PagSeguro Digital 0 1 8 0 2.89

SciPlay currently has a consensus price target of $18.55, suggesting a potential upside of 7.29%. PagSeguro Digital has a consensus price target of $59.38, suggesting a potential upside of 26.68%. Given PagSeguro Digital’s stronger consensus rating and higher probable upside, analysts clearly believe PagSeguro Digital is more favorable than SciPlay.

Summary

PagSeguro Digital beats SciPlay on 12 of the 14 factors compared between the two stocks.

SciPlay Company Profile

SciPlay Corporation develops, markets, and operates a portfolio of social games for mobile and web platforms worldwide. It offers seven games, which include social casino games, such as Jackpot Party Casino, Gold Fish Casino, Hot Shot Casino, and Quick Hit Slots, as well as casual games comprising MONOPOLY Slots, Bingo Showdown, and 88 Fortunes Slots. The company's social casino games include slots-style game play, as well as table games-style game play; and casual games blend slots-style or bingo game play with adventure game features. It also offers titles and content from third-party licensed brands. The company was formerly known as SG Social Games Corporation and changed its name to SciPlay Corporation in March 2019. SciPlay Corporation was founded in 1997 and is based in Las Vegas, Nevada. SciPlay Corporation is a subsidiary of Scientific Games Corporation.

PagSeguro Digital Company Profile

PagSeguro Digital Ltd., together with its subsidiaries, provides financial technology solutions and services for consumers, individual entrepreneurs, micro-merchants, and small and medium-sized companies in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, a digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; PagBank digital account, which offers banking services through the PagBank mobile app; and Free PagSeguro digital account, which centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem. It also offers online gaming and cross-border digital services. In addition, the company offers functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, and point of sale app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers. Additionally, the company engages in the in-person payment activities through POS devices; and issuance of prepaid cards for spending or withdrawing account balances. It also operates an online platform that facilitates peer-to-peer lending. The company was founded in 2006 and is headquartered in São Paulo, Brazil. PagSeguro Digital Ltd. is a subsidiary of Universo Online S.A.

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