Head-To-Head Review: Western Union (NYSE:WU) vs. Shift4 Payments (NYSE:FOUR)

Western Union (NYSE:WU) and Shift4 Payments (NYSE:FOUR) are both mid-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

91.8% of Western Union shares are held by institutional investors. Comparatively, 98.9% of Shift4 Payments shares are held by institutional investors. 3.3% of Western Union shares are held by company insiders. Comparatively, 1.5% of Shift4 Payments shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Western Union has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, Shift4 Payments has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Profitability

This table compares Western Union and Shift4 Payments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Union	10.88%	55.94%	6.39%
Shift4 Payments	2.63%	33.55%	5.01%

Earnings and Valuation

This table compares Western Union and Shift4 Payments”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Union	$4.05 billion	0.55	$499.60 million	$1.36	5.24
Shift4 Payments	$4.18 billion	0.75	$119.00 million	$0.84	47.02

Western Union has higher earnings, but lower revenue than Shift4 Payments. Western Union is trading at a lower price-to-earnings ratio than Shift4 Payments, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Western Union and Shift4 Payments, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Union	6	7	0	0	1.54
Shift4 Payments	1	11	10	0	2.41

Western Union currently has a consensus target price of $8.82, indicating a potential upside of 23.68%. Shift4 Payments has a consensus target price of $70.19, indicating a potential upside of 77.71%. Given Shift4 Payments’ stronger consensus rating and higher probable upside, analysts plainly believe Shift4 Payments is more favorable than Western Union.

Summary

Shift4 Payments beats Western Union on 8 of the 14 factors compared between the two stocks.

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.

About Shift4 Payments

Shift4 Payments, Inc. (NYSE FOUR) provides integrated payment processing and technology solutions in the United States. Its payments platform provides omni-channel card acceptance and processing solutions, including end-to-end payment processing for various payment types; merchant acquiring; proprietary omni-channel gateway; complementary software integrations; integrated and mobile point-of-sale (POS) solutions; security and risk management solutions; and reporting and analytical tools, as well as tokenization, risk management/underwriting, payment device and chargeback management, fraud prevention, and gift card solutions. The company also offers suite of technology solutions, such as Lighthouse, a cloud-based business intelligence tool that includes customer engagement, social media management, online reputation management, scheduling, and product pricing, as well as reporting and analytics; integrated POS for merchants business; and Skytab, a mobile payment solution. In addition, it provides marketplace technology that enable seamless integrations into third-party applications, which includes online delivery services, payroll, timekeeping, and other human resource services. Further, the company offers merchant management, training and education, marketing management, and incentives tracking solutions. Additionally, it provides merchant underwriting, onboarding and activation, training, risk management, and support services; and software integrations and compliance management, and partner support and services. The company was founded in 1998 and is headquartered in Allentown, Pennsylvania.