Analyzing Paymentus (NYSE:PAY) & MediaAlpha (NYSE:MAX)

MediaAlpha (NYSE:MAX) and Paymentus (NYSE:PAY) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for MediaAlpha and Paymentus, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MediaAlpha	0	1	6	0	2.86
Paymentus	0	4	2	1	2.57

MediaAlpha currently has a consensus price target of $17.21, indicating a potential upside of 65.36%. Paymentus has a consensus price target of $36.00, indicating a potential downside of 2.51%. Given MediaAlpha’s stronger consensus rating and higher probable upside, equities research analysts plainly believe MediaAlpha is more favorable than Paymentus.

Insider and Institutional Ownership

64.4% of MediaAlpha shares are held by institutional investors. Comparatively, 78.4% of Paymentus shares are held by institutional investors. 13.4% of MediaAlpha shares are held by insiders. Comparatively, 75.4% of Paymentus shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MediaAlpha	1.41%	-11.98%	5.19%
Paymentus	5.19%	10.84%	9.24%

Earnings and Valuation

This table compares MediaAlpha and Paymentus”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MediaAlpha	$1.00 billion	0.70	-$40.42 million	$0.28	37.18
Paymentus	$962.11 million	4.80	$22.32 million	$0.39	94.68

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

Volatility and Risk

MediaAlpha has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500. Comparatively, Paymentus has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500.

Summary

Paymentus beats MediaAlpha on 11 of the 15 factors compared between the two stocks.

About MediaAlpha

MediaAlpha, Inc., through its subsidiaries, operates an insurance customer acquisition platform in the United States. It optimizes customer acquisition in various verticals of property and casualty insurance, health insurance, and life insurance. The company was founded in 2014 and is headquartered in Los Angeles, California.

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.