Paylocity (NASDAQ:PCTY) and Block (NYSE:XYZ) Head to Head Survey

Block (NYSE:XYZ) and Paylocity (NASDAQ:PCTY) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Risk & Volatility

Block has a beta of 2.67, suggesting that its share price is 167% more volatile than the S&P 500. Comparatively, Paylocity has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Block and Paylocity, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Block	1	9	23	2	2.74
Paylocity	1	5	15	0	2.67

Block currently has a consensus price target of $81.50, indicating a potential upside of 53.25%. Paylocity has a consensus price target of $180.05, indicating a potential upside of 70.41%. Given Paylocity’s higher possible upside, analysts clearly believe Paylocity is more favorable than Block.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Block	$24.12 billion	1.34	$2.90 billion	$4.96	10.72
Paylocity	$1.60 billion	3.57	$227.13 million	$4.25	24.86

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

Insider & Institutional Ownership

70.4% of Block shares are owned by institutional investors. Comparatively, 94.8% of Paylocity shares are owned by institutional investors. 10.5% of Block shares are owned by insiders. Comparatively, 19.4% of Paylocity shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Block and Paylocity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Block	12.99%	5.54%	3.24%
Paylocity	14.19%	23.44%	5.24%

Summary

Paylocity beats Block on 8 of the 15 factors compared between the two stocks.

About Block

Square, Inc. provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data. Square, Inc. was founded in 2009 and is headquartered in San Francisco, California.

About Paylocity

Paylocity Holding Corporation engages in the provision of cloud-based human capital management and payroll software solutions for workforce in the United States. The company offers payroll software solution for global payroll, expense management, tax services, on demand payment, and garnishment managed services; and time and labor management software for time and attendance, scheduling, and time collection. It also provides human resources (HR) software solutions for employee self-service, compliance, HR edge, data analytics, and workflows and documents, as well as human resource management system; talent management system for recruiting, onboarding, performance, compensation, and learning; and benefits administration software. In addition, the company offers employee experience platform for community, employee voice, recognition and rewards, video, and modern workforce index; HR reporting software; and mobile HR solutions. Further, it provides implementation and training, client, and tax and regulatory services. The company serves for-profit and non-profit organizations across industries, including business services, financial services, healthcare, manufacturing, restaurants, retail, technology, and others. It sells its products through sales representatives. The company was founded in 1997 and is headquartered in Schaumburg, Illinois.