Head-To-Head Analysis: Paypal (NASDAQ:PYPL) vs. Msci (NASDAQ:MSCI)

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Paypal (NASDAQ:PYPL) and Msci (NYSE:MSCI) are both large-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Paypal 15.36% 17.14% 5.83%
Msci 39.27% -599.92% 14.50%

Dividends

Msci pays an annual dividend of $2.32 per share and has a dividend yield of 1.0%. Paypal does not pay a dividend. Msci pays out 43.4% of its earnings in the form of a dividend. Msci has increased its dividend for 4 consecutive years.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Paypal $15.45 billion 7.99 $2.06 billion $1.79 58.63
Msci $1.43 billion 13.12 $507.89 million $5.35 41.53

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

Insider & Institutional Ownership

80.7% of Paypal shares are owned by institutional investors. Comparatively, 92.1% of Msci shares are owned by institutional investors. 0.2% of Paypal shares are owned by company insiders. Comparatively, 3.1% of Msci shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Paypal and Msci, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Paypal 0 8 21 0 2.72
Msci 0 4 3 0 2.43

Paypal currently has a consensus target price of $120.99, indicating a potential upside of 15.29%. Msci has a consensus target price of $219.14, indicating a potential downside of 1.36%. Given Paypal’s stronger consensus rating and higher probable upside, analysts plainly believe Paypal is more favorable than Msci.

Risk & Volatility

Paypal has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Msci has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.

Summary

Msci beats Paypal on 9 of the 17 factors compared between the two stocks.

About Paypal

PayPal Holdings, Inc. operates as a technology platform and digital payments 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 iZettle products. The company's Payments Platform allows consumers to send 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.

About Msci

MSCI Inc., together with its subsidiaries, provides investment decision support tools for the clients to manage their investment processes worldwide. The company operates through four segments: Index, Analytics, ESG, and Real Estate. The Index segment primarily provides equity indexes for use in various areas of the investment process, including index-linked product creation and performance benchmarking, as well as portfolio construction and rebalancing, and asset allocation. The Analytics segment offers risk management, performance attribution, and portfolio management content, applications, and services that provide clients with an integrated view of risk and return, and an analysis of market, credit, liquidity, and counterparty risk across various asset classes, spanning short, medium, and long-term time horizons; and various managed services for clients to address the needs of various specialized areas of the investment community by providing a reporting service and performance reporting tools to institutional consultants and investors in hedge funds. The ESG segment provides products and services that help institutional investors understand how environmental, social, and governance (ESG) factors impact the long-term risk of their investments; and data and ratings products for use in the construction of equity and fixed income indexes to help institutional investors benchmark ESG investment performance and issue index-based investment products, as well as manage, measure, and report on ESG mandates. The Real Estate segment offers real estate performance analysis for funds, investors, managers, and lenders. This segment provides products and services that include research, reporting, and benchmarking; and business intelligence to real estate owners, managers, developers, and brokers. MSCI Inc. was founded in 1998 and is headquartered in New York, New York.

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