Financial Review: Waton Financial (NASDAQ:WTF) vs. XP (NASDAQ:XP)

Waton Financial (NASDAQ:WTF) and XP (NASDAQ:XP) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Profitability

This table compares Waton Financial and XP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waton Financial	N/A	N/A	N/A
XP	27.40%	22.51%	1.34%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waton Financial	1	0	0	0	1.00
XP	0	3	3	0	2.50

XP has a consensus price target of $22.75, indicating a potential upside of 52.62%. Given XP’s stronger consensus rating and higher probable upside, analysts clearly believe XP is more favorable than Waton Financial.

Valuation & Earnings

This table compares Waton Financial and XP”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waton Financial	$10.59 million	11.52	-$11.97 million	N/A	N/A
XP	$3.30 billion	2.43	$925.91 million	$1.81	8.24

XP has higher revenue and earnings than Waton Financial.

Volatility & Risk

Waton Financial has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500. Comparatively, XP has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Institutional and Insider Ownership

59.2% of XP shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

XP beats Waton Financial on 9 of the 11 factors compared between the two stocks.

About Waton Financial

Waton Financial Ltd. is a holding company, which engages in the provision of securities brokerage and financial technology services. It is also involved in software licensing and related support services including the licensing of trading platform app, upgrades and enhancements, maintenance, and other related services to financial institutions. The company was founded on June 25, 2010 and is headquartered in Hong Kong.

About XP

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.