Head-To-Head Survey: Western Union (NYSE:WU) & Green Dot (NYSE:GDOT)

Green Dot (NYSE:GDOT) and Western Union (NYSE:WU) are both business services companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Profitability

This table compares Green Dot and Western Union’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Green Dot	-2.33%	9.81%	1.59%
Western Union	18.80%	60.85%	6.97%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Green Dot and Western Union, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Green Dot	2	4	1	0	1.86
Western Union	5	10	0	0	1.67

Green Dot currently has a consensus price target of $12.56, suggesting a potential upside of 2.78%. Western Union has a consensus price target of $8.82, suggesting a potential downside of 5.54%. Given Green Dot’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Green Dot is more favorable than Western Union.

Insider and Institutional Ownership

92.6% of Green Dot shares are held by institutional investors. Comparatively, 91.8% of Western Union shares are held by institutional investors. 1.4% of Green Dot shares are held by company insiders. Comparatively, 1.6% of Western Union shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Green Dot has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Western Union has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Green Dot	$1.72 billion	0.39	-$26.70 million	($0.85)	-14.38
Western Union	$4.21 billion	0.70	$934.20 million	$2.29	4.08

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

Summary

Western Union beats Green Dot on 9 of the 14 factors compared between the two stocks.

About Green Dot

Green Dot Corporation, a financial technology and registered bank holding company, provides various financial services to consumers and businesses in the United States. It operates through three segments: Consumer Services, Business to Business Services, and Money Movement Services. The company provides deposit account programs, including consumer and small business checking account products, network-branded reloadable prepaid debit cards and gift cards, and secured credit programs. It offers money processing services, such as cash transfer services that enable consumers to deposit or pick up cash and pay bills with cash at the point-of-sale at any participating retailer; and simply paid disbursement services, which enable wages and authorized funds disbursement to its deposit account programs and accounts issued by any third-party bank or program manager. In addition, the company offers tax processing services comprising tax refund transfers, which provide the processing technology to facilitate receipt of a taxpayers' refund proceeds; small business lending to independent tax preparation providers that seek small advances; and fast cash advance, a loan that enables tax refund recipients. Green Dot Corporation was incorporated in 1999 and is headquartered in Austin, Texas.

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.