Analyzing Daiwa Securities Group (OTCMKTS:DSEEY) and WEX (NYSE:WEX)

Daiwa Securities Group (OTCMKTS:DSEEY) and WEX (NYSE:WEX) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Insider and Institutional Ownership

97.5% of WEX shares are held by institutional investors. 1.4% of WEX shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Daiwa Securities Group and WEX”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Daiwa Securities Group	$9.75 billion	1.61	$1.16 billion	$0.93	11.97
WEX	$2.66 billion	2.25	$304.10 million	$11.62	15.68

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Daiwa Securities Group and WEX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Daiwa Securities Group	0	1	0	0	2.00
WEX	0	8	5	1	2.50

WEX has a consensus price target of $191.10, indicating a potential upside of 4.89%. Given WEX’s stronger consensus rating and higher probable upside, analysts plainly believe WEX is more favorable than Daiwa Securities Group.

Volatility and Risk

Daiwa Securities Group has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, WEX has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares Daiwa Securities Group and WEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Daiwa Securities Group	12.51%	9.31%	0.49%
WEX	14.05%	45.74%	3.66%

Summary

WEX beats Daiwa Securities Group on 13 of the 15 factors compared between the two stocks.

About Daiwa Securities Group

Daiwa Securities Group Inc. is a Japan-based financial services holding company whose principal business is securities and investment services. Its offerings include brokerage and investment advice for individual and corporate clients, as well as services for institutional investors. The group’s businesses also include investment banking, such as securities underwriting and financial advisory services, along with asset management and investment activities. It serves clients in Japan and through operations in international markets.

About WEX

WEX Inc. is a financial technology company that provides payment processing and business management solutions. Founded in 1983 as Wright Express, the company adopted the WEX name in 2012 and is headquartered in Portland, Maine. WEX’s fleet business offers payment cards and related services for commercial and government fleets, including tools to manage fuel purchases, vehicle expenses and fleet operations. Its travel and corporate payments business provides solutions such as virtual cards and payment services for travel companies and other businesses.