XP (XP) versus Its Competitors Head to Head Analysis

XP (NASDAQ:XP) is one of 1,743 public companies in the “Capital Markets” industry, but how does it contrast to its peers? We will compare XP to similar companies based on the strength of its earnings, institutional ownership, valuation, dividends, risk, analyst recommendations and profitability.

Insider & Institutional Ownership

59.2% of XP shares are owned by institutional investors. Comparatively, 30.6% of shares of all “Capital Markets” companies are owned by institutional investors. 12.9% of shares of all “Capital Markets” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

XP pays an annual dividend of $0.40 per share and has a dividend yield of 2.6%. XP pays out 20.9% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 29.2% of their earnings in the form of a dividend.

Volatility and Risk

XP has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, XP’s peers have a beta of 0.79, indicating that their average stock price is 21% less volatile than the S&P 500.

Valuation & Earnings

This table compares XP and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
XP	$3.30 billion	$925.91 million	8.10
XP Competitors	$2.39 billion	$398.52 million	17.39

XP has higher revenue and earnings than its peers. XP is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares XP and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
XP	27.20%	22.19%	1.33%
XP Competitors	318.48%	79.19%	3.72%

Analyst Ratings

This is a summary of current recommendations and price targets for XP and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
XP	0	5	4	0	2.44
XP Competitors	5565	20155	22501	642	2.37

XP currently has a consensus target price of $23.83, suggesting a potential upside of 54.06%. As a group, “Capital Markets” companies have a potential upside of 24.12%. Given XP’s stronger consensus rating and higher probable upside, analysts plainly believe XP is more favorable than its peers.

Summary

XP peers beat XP on 8 of the 15 factors compared.

XP Company Profile

XP Inc. provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients. The company also offers XP Educação, an online financial education portal that offers seminars, classes, and learning tools to help teach individuals on topics, such as basics of investing, techniques, and investment strategies, as well as insurance brokerage services. In addition, it operates XP Platform, an open product platform that provides clients to access investment products in the market, including equity and fixed income securities, mutual and hedge funds, structured products, life insurance, pension plans, real-estate investment funds, and others. The company was founded in 2001 and is based in São Paulo, Brazil.