Comparing WEX (NYSE:WEX) and Walker & Dunlop (NYSE:WD)

WEX (NYSE:WEX) and Walker & Dunlop (NYSE:WD) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for WEX and Walker & Dunlop, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WEX	0	8	6	0	2.43
Walker & Dunlop	1	0	5	0	2.67

WEX presently has a consensus price target of $185.64, indicating a potential upside of 7.45%. Walker & Dunlop has a consensus price target of $61.00, indicating a potential upside of 88.87%. Given Walker & Dunlop’s stronger consensus rating and higher possible upside, analysts clearly believe Walker & Dunlop is more favorable than WEX.

Profitability

This table compares WEX and Walker & Dunlop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WEX	12.56%	43.19%	3.53%
Walker & Dunlop	2.94%	7.25%	2.31%

Insider and Institutional Ownership

97.5% of WEX shares are owned by institutional investors. Comparatively, 81.0% of Walker & Dunlop shares are owned by institutional investors. 1.4% of WEX shares are owned by insiders. Comparatively, 4.0% of Walker & Dunlop shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares WEX and Walker & Dunlop”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WEX	$2.79 billion	2.11	$304.10 million	$10.04	17.21
Walker & Dunlop	$1.23 billion	0.90	$57.08 million	$1.12	28.84

WEX has higher revenue and earnings than Walker & Dunlop. WEX is trading at a lower price-to-earnings ratio than Walker & Dunlop, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

WEX has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, Walker & Dunlop has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.

Summary

WEX beats Walker & Dunlop on 9 of the 14 factors compared between the two stocks.

About WEX

WEX Inc. operates a commerce platform in the United States and internationally. The Mobility segment offers fleet vehicle payment solutions, transaction processing, and information management services; and provides account activation and account retention services; authorization and billing inquiries, and account maintenance services; account management; credit and collections services; merchant services; analytics solutions; and ancillary services and offerings. This segment markets its products directly and indirectly to businesses and government agencies with fleets of commercial vehicles; and indirectly through co-branded and private label relationships. The Corporate Payments segment provides payment solutions, including embedded payments; and accounts payable automation and spend management solutions. This segment also markets its products directly and indirectly to customers in travel, fintech, insurance, consumer bill pay, and media verticals. The Benefits Solutions segment offers software-as-a-service (SaaS) platform for consumer directed healthcare benefits and full-service benefit enrollment solutions. In addition, its SaaS platform includes embedded payment solutions and plan administration services for consumer-directed health benefits; COBRA accounts; and benefit enrollment and administration services. Further, it offers custodial and depository services for health savings accounts; and markets its products through third-party administrators, financial institutions, payroll providers, and health plans. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is based in Portland, Maine.

About Walker & Dunlop

Walker & Dunlop, Inc. is a holding company, which engages in the provision of commercial real estate and finance services. It operates through the following segments: Capital Markets, Servicing and Asset Management, and Corporate. The Capital Markets segment offers a comprehensive range of commercial real estate finance products to customers. The Servicing and Asset Management segment includes servicing and asset-managing and managing third-party capital investments. The Corporate segment consists primarily of the company’s treasury operations and other corporate-level activities. The company was founded by Oliver Walker and Laird Dunlop in 1937 and is headquartered in Bethesda, MD.