Head to Head Analysis: Sezzle (NASDAQ:SEZL) & Western Union (NYSE:WU)

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

Earnings and Valuation

This table compares Sezzle and Western Union”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sezzle	$450.28 million	7.23	$133.13 million	$4.21	22.88
Western Union	$4.05 billion	0.70	$499.60 million	$1.36	6.67

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

Insider and Institutional Ownership

2.0% of Sezzle shares are held by institutional investors. Comparatively, 91.8% of Western Union shares are held by institutional investors. 49.5% of Sezzle shares are held by company insiders. Comparatively, 3.3% of Western Union shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Sezzle and Western Union, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sezzle	0	3	4	0	2.57
Western Union	5	9	0	0	1.64

Sezzle presently has a consensus price target of $118.00, suggesting a potential upside of 22.48%. Western Union has a consensus price target of $8.82, suggesting a potential downside of 2.72%. Given Sezzle’s stronger consensus rating and higher possible upside, research analysts clearly believe Sezzle is more favorable than Western Union.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sezzle	30.83%	87.46%	36.29%
Western Union	10.88%	55.94%	6.39%

Risk and Volatility

Sezzle has a beta of 6.91, meaning that its stock price is 591% more volatile than the S&P 500. Comparatively, Western Union has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Summary

Sezzle beats Western Union on 11 of the 14 factors compared between the two stocks.

About Sezzle

Sezzle Inc. operates as a technology-enabled payments company primarily in the United States and Canada. The company provides payment solution in-store and at online retail stores; and through proprietary payments solution that connects consumers with merchants. It also offers Sezzle Platform that provides a payments solution for consumers that extends credit at the point-of-sale allowing consumers to purchase and receive the ordered merchandise at the time of sale while paying in installments over time; Pay-in-Four, which allows consumers to pay a fourth of the purchase price up front and then another fourth of the purchase price every two weeks thereafter over a total of six weeks; Pay-in-Full that allows consumers to pay for the full value of their order up-front through the Sezzle Platform without the extension of credit; and Pay-in-Two and other alternative installment options, which allow consumer to pay half of the value of their order up-front and the second half in two weeks. In addition, the company provides Sezzle Virtual Card that allows consumers to access the Sezzle Platform in the form of close-end installment loans and shop with merchants that are not integrated with Sezzle; Sezzle Anywhere, a paid subscription service that allows consumers to use their Sezzle Virtual Card at any merchant online or in-store; Sezzle Premium, a paid subscription service that allows its consumers to access large, non-integrated premium merchants; and Sezzle Up, an opt-in feature of the Sezzle Platform. Further, it offers Long-Term Lending through collaboration with third-party lenders and Product Innovation. Sezzle Inc. was incorporated in 2016 and is headquartered in Minneapolis, Minnesota.

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.