Western Union (NYSE:WU – Get Free Report) and Better Home & Finance (NASDAQ:BETR – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.
Analyst Ratings
This is a summary of recent recommendations for Western Union and Better Home & Finance, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Western Union | 8 | 6 | 0 | 0 | 1.43 |
| Better Home & Finance | 1 | 1 | 8 | 0 | 2.70 |
Western Union presently has a consensus target price of $7.36, suggesting a potential upside of 22.83%. Better Home & Finance has a consensus target price of $27.86, suggesting a potential upside of 136.28%. Given Better Home & Finance’s stronger consensus rating and higher possible upside, analysts clearly believe Better Home & Finance is more favorable than Western Union.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Western Union | $4.05 billion | 0.46 | $499.60 million | $1.23 | 4.87 |
| Better Home & Finance | $164.87 million | 1.36 | -$165.87 million | ($11.02) | -1.07 |
Western Union has higher revenue and earnings than Better Home & Finance. Better Home & Finance is trading at a lower price-to-earnings ratio than Western Union, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
91.8% of Western Union shares are held by institutional investors. Comparatively, 20.9% of Better Home & Finance shares are held by institutional investors. 3.3% of Western Union shares are held by insiders. Comparatively, 27.7% of Better Home & Finance shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility and Risk
Western Union has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Better Home & Finance has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.
Profitability
This table compares Western Union and Better Home & Finance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Western Union | 9.79% | 50.89% | 5.87% |
| Better Home & Finance | -94.52% | -409.62% | -9.94% |
Summary
Western Union beats Better Home & Finance on 8 of the 14 factors compared between the two stocks.
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.
About Better Home & Finance
Better Home & Finance Holding Co. engages in the provision of comprehensive homeownership services. It offers mortgage loans, real estate agent services, and title and homeowner’s insurance services. The company was founded in 2014 and is headquartered in New York, NY.
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