Mastercard (NYSE:MA) vs. Equitable (NYSE:EQH) Financial Contrast

Mastercard (NYSE:MA) and Equitable (NYSE:EQH) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Volatility & Risk

Mastercard has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500. Comparatively, Equitable has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.

Insider & Institutional Ownership

97.3% of Mastercard shares are held by institutional investors. Comparatively, 92.7% of Equitable shares are held by institutional investors. 0.1% of Mastercard shares are held by company insiders. Comparatively, 1.0% of Equitable shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Mastercard and Equitable’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mastercard	46.34%	239.99%	30.88%
Equitable	-8.72%	511.35%	0.61%

Dividends

Mastercard pays an annual dividend of $3.48 per share and has a dividend yield of 0.6%. Equitable pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Mastercard pays out 19.1% of its earnings in the form of a dividend. Equitable pays out -36.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Mastercard has raised its dividend for 13 consecutive years and Equitable has raised its dividend for 2 consecutive years. Equitable is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Mastercard and Equitable”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mastercard	$32.79 billion	16.58	$14.97 billion	$18.18	34.14
Equitable	$11.66 billion	1.27	-$1.38 billion	($3.31)	-16.34

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

Analyst Recommendations

This is a breakdown of current recommendations for Mastercard and Equitable, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mastercard	1	1	30	2	2.97
Equitable	0	3	10	1	2.86

Mastercard currently has a consensus target price of $682.66, indicating a potential upside of 10.00%. Equitable has a consensus target price of $63.18, indicating a potential upside of 16.80%. Given Equitable’s higher possible upside, analysts plainly believe Equitable is more favorable than Mastercard.

Summary

Mastercard beats Equitable on 12 of the 18 factors compared between the two stocks.

About Mastercard

Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The company offers integrated products and value-added services for account holders, merchants, financial institutions, digital partners, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid programs services; and commercial credit, debit, and prepaid payment products and solutions. It also provides solutions that enable businesses or governments to make payments to businesses, including Virtual Card Number, which is generated dynamically from a physical card and leverages the credit limit of the funding account; a platform to optimize supplier payment enablement campaigns for financial institutions; and treasury intelligence platform that offers corporations with recommendations to enhance working capital performance and accelerate spend on cards. In addition, the company offers Mastercard Send, which partners with digital messaging and payment platforms to enable consumers to send money directly within applications to other consumers; and Mastercard Cross-Border Services enables a range of payment flows through a distribution network with a single point of access to send and receive money globally through various channels, including bank accounts, mobile wallets, cards, and cash payouts. Further, it provides cyber and intelligence solutions; insights and analytics, consulting, marketing, loyalty, processing, and payment gateway solutions for e-commerce merchants; and open banking and digital identity services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus name. Mastercard Incorporated was founded in 1966 and is headquartered in Purchase, New York.

About Equitable

Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, New York.