Healthequity (NASDAQ: PYPL) and Paypal (NASDAQ:PYPL) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

96.9% of Healthequity shares are held by institutional investors. Comparatively, 79.6% of Paypal shares are held by institutional investors. 4.0% of Healthequity shares are held by insiders. Comparatively, 0.2% of Paypal shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Healthequity and Paypal’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Healthequity $229.52 million 25.00 $47.36 million $0.54 171.22
Paypal $13.09 billion 8.19 $1.80 billion $1.39 65.19

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Healthequity and Paypal, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Healthequity 0 3 9 0 2.75
Paypal 0 7 32 0 2.82

Healthequity presently has a consensus price target of $95.17, suggesting a potential upside of 2.93%. Paypal has a consensus price target of $89.92, suggesting a potential downside of 0.77%. Given Healthequity’s higher probable upside, equities analysts clearly believe Healthequity is more favorable than Paypal.

Profitability

This table compares Healthequity and Paypal’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Healthequity 23.81% 12.58% 11.89%
Paypal 14.02% 12.91% 4.85%

Risk and Volatility

Healthequity has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Paypal has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.

Summary

Healthequity beats Paypal on 8 of the 14 factors compared between the two stocks.

About Healthequity

HealthEquity, Inc. provides various solutions for managing health care accounts, health reimbursement arrangements, and flexible spending accounts for health plans, insurance companies, and third-party administrators in the United States. The company offers healthcare saving and spending platform, a cloud-based platform for individuals to make health saving and spending decisions, pay healthcare bills, compare treatment options and prices, receive personalized benefit and clinical information, earn wellness incentives, grow their savings, and make investment choices; and health savings accounts. It also provides mutual fund investment platform; and online-only investment advisory services through Advisor, a Web-based tool. In addition, the company offers health reimbursement and flexible spending arrangements solutions; and Employee Retirement Income Security Act's plan administration and investment services. HealthEquity, Inc. was founded in 2002 and is headquartered in Draper, Utah.

About Paypal

PayPal Holdings, Inc. operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants worldwide. Its payment solutions include PayPal, PayPal Credit, Braintree, Venmo, Xoom, and Paydiant products. The company's platform allows consumers to shop by sending payments, withdraw funds to their bank accounts, and hold balances in their PayPal accounts in various currencies. It also offers gateway services that enable merchants to accept payments online with credit or debit cards. PayPal Holdings, Inc. was founded in 1998 and is headquartered in San Jose, California.

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