Financial Analysis: Equitable (NYSE:EQH) and Paymentus (NYSE:PAY)

Equitable (NYSE:EQH) and Paymentus (NYSE:PAY) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Equitable and Paymentus, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equitable	1	2	10	1	2.79
Paymentus	0	5	1	2	2.62

Equitable presently has a consensus target price of $61.82, suggesting a potential upside of 14.79%. Paymentus has a consensus target price of $38.67, suggesting a potential upside of 27.90%. Given Paymentus’ higher probable upside, analysts clearly believe Paymentus is more favorable than Equitable.

Profitability

This table compares Equitable and Paymentus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equitable	-8.72%	511.35%	0.61%
Paymentus	6.24%	15.26%	12.80%

Risk & Volatility

Equitable has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Paymentus has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Earnings & Valuation

This table compares Equitable and Paymentus”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equitable	$10.62 billion	1.39	-$1.38 billion	($3.31)	-16.27
Paymentus	$1.36 billion	2.80	$66.94 million	$0.66	45.81

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

Institutional and Insider Ownership

92.7% of Equitable shares are held by institutional investors. Comparatively, 78.4% of Paymentus shares are held by institutional investors. 1.0% of Equitable shares are held by insiders. Comparatively, 55.7% of Paymentus shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Paymentus beats Equitable on 10 of the 15 factors compared between the two stocks.

About Equitable

Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, New York.

About Paymentus

Paymentus Holdings, Inc. provides cloud-based bill payment technology and solutions in the United States and internationally. The company offers electronic bill presentment and payment services, enterprise customer communication, and self-service revenue management to billers through a software-as-a-service technology platform. Its platform's payment processing includes credit cards, debit cards, eChecks, and digital wallets. It serves utility, financial service, government, insurance, telecommunication, real estate management, education, consumer finance, healthcare, and small business industries. The company was founded in 2004 and is headquartered in Charlotte, North Carolina.