WEX (NYSE:WEX) & Finance of America Companies (NYSE:FOA) Critical Contrast

WEX (NYSE:WEX) and Finance of America Companies (NYSE:FOA) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.

Volatility and Risk

WEX has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Finance of America Companies has a beta of 1.65, meaning that its stock price is 65% more volatile than the S&P 500.

Valuation & Earnings

This table compares WEX and Finance of America Companies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WEX	$2.66 billion	2.55	$304.10 million	$10.04	19.83
Finance of America Companies	$497.43 million	0.40	$45.24 million	($3.01)	-7.42

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

Institutional & Insider Ownership

97.5% of WEX shares are owned by institutional investors. Comparatively, 97.2% of Finance of America Companies shares are owned by institutional investors. 1.4% of WEX shares are owned by insiders. Comparatively, 35.4% of Finance of America Companies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares WEX and Finance of America Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WEX	12.56%	43.19%	3.53%
Finance of America Companies	-0.10%	28.51%	0.37%

Analyst Ratings

This is a summary of recent ratings for WEX and Finance of America Companies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WEX	0	8	6	0	2.43
Finance of America Companies	2	1	2	0	2.00

WEX presently has a consensus target price of $183.30, indicating a potential downside of 7.93%. Finance of America Companies has a consensus target price of $30.50, indicating a potential upside of 36.49%. Given Finance of America Companies’ higher probable upside, analysts clearly believe Finance of America Companies is more favorable than WEX.

Summary

WEX beats Finance of America Companies on 11 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 Finance of America Companies

Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.