Comparing Visa (NYSE:V) and UWM (NYSE:UWMC)

UWM (NYSE:UWMC) and Visa (NYSE:V) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Volatility and Risk

UWM has a beta of 1.82, suggesting that its stock price is 82% more volatile than the S&P 500. Comparatively, Visa has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for UWM and Visa, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UWM	1	10	4	0	2.20
Visa	0	0	35	2	3.05

UWM presently has a consensus target price of $2.45, indicating a potential upside of 60.36%. Visa has a consensus target price of $440.82, indicating a potential upside of 4.37%. Given UWM’s higher possible upside, research analysts clearly believe UWM is more favorable than Visa.

Insider & Institutional Ownership

53.6% of UWM shares are held by institutional investors. Comparatively, 82.2% of Visa shares are held by institutional investors. 80.9% of UWM shares are held by insiders. Comparatively, 0.1% of Visa shares are held 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.

Dividends

UWM pays an annual dividend of $0.40 per share and has a dividend yield of 26.2%. Visa pays an annual dividend of $2.68 per share and has a dividend yield of 0.6%. UWM pays out 2,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Visa pays out 21.7% of its earnings in the form of a dividend. Visa has increased its dividend for 17 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
UWM	0.55%	4.24%	0.33%
Visa	51.20%	70.50%	26.59%

Earnings & Valuation

This table compares UWM and Visa”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UWM	$1.27 billion	1.93	$27.38 million	$0.02	76.25
Visa	$45.90 billion	16.42	$23.50 billion	$12.33	34.25

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

Summary

Visa beats UWM on 13 of the 18 factors compared between the two stocks.

About UWM

UWM Holdings Corporation engages in the residential mortgage lending business in the United States. The company offers mortgage loans through wholesale channel. It originates primarily conforming and government loans. UWM Holdings Corporation was founded in 1986 and is headquartered in Pontiac, Michigan.

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.