Contrasting Block (NYSE:XYZ) & MGIC Investment (NYSE:MTG)

MGIC Investment (NYSE:MTG) and Block (NYSE:XYZ) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Earnings & Valuation

This table compares MGIC Investment and Block”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGIC Investment	$1.20 billion	5.09	$738.35 million	$3.20	9.28
Block	$25.04 billion	1.83	$1.31 billion	$0.56	136.18

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

Insider and Institutional Ownership

95.6% of MGIC Investment shares are owned by institutional investors. Comparatively, 70.4% of Block shares are owned by institutional investors. 1.3% of MGIC Investment shares are owned by company insiders. Comparatively, 11.4% of Block shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares MGIC Investment and Block’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MGIC Investment	59.20%	13.90%	10.81%
Block	1.43%	8.10%	4.53%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for MGIC Investment and Block, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGIC Investment	0	4	1	2	2.71
Block	0	9	29	4	2.88

MGIC Investment presently has a consensus price target of $30.60, suggesting a potential upside of 3.05%. Block has a consensus price target of $95.42, suggesting a potential upside of 25.13%. Given Block’s stronger consensus rating and higher possible upside, analysts plainly believe Block is more favorable than MGIC Investment.

Risk & Volatility

MGIC Investment has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Block has a beta of 2.52, suggesting that its stock price is 152% more volatile than the S&P 500.

Summary

Block beats MGIC Investment on 9 of the 15 factors compared between the two stocks.

About MGIC Investment

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, the District of Columbia, Puerto Rico, and Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides pool insurance for secondary market mortgage transactions; and contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.

About Block

Square, Inc. provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data. Square, Inc. was founded in 2009 and is headquartered in San Francisco, California.