Verisk Analytics (VRSK) and PagSeguro Digital (PAGS) Critical Review

Verisk Analytics (NASDAQ: VRSK) and PagSeguro Digital (NYSE:PAGS) are both business services companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Verisk Analytics and PagSeguro Digital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Verisk Analytics 26.05% 31.75% 10.10%
PagSeguro Digital N/A N/A N/A

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Verisk Analytics and PagSeguro Digital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verisk Analytics 1 6 6 0 2.38
PagSeguro Digital 2 1 7 0 2.50

Verisk Analytics presently has a consensus target price of $103.23, indicating a potential downside of 3.02%. PagSeguro Digital has a consensus target price of $36.70, indicating a potential upside of 31.92%. Given PagSeguro Digital’s stronger consensus rating and higher probable upside, analysts clearly believe PagSeguro Digital is more favorable than Verisk Analytics.

Institutional & Insider Ownership

91.3% of Verisk Analytics shares are held by institutional investors. Comparatively, 91.8% of PagSeguro Digital shares are held by institutional investors. 3.2% of Verisk Analytics shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Verisk Analytics and PagSeguro Digital’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Verisk Analytics $2.15 billion 8.20 $555.10 million $3.21 33.16
PagSeguro Digital $790.32 million 4.33 $149.95 million $0.57 48.81

Verisk Analytics has higher revenue and earnings than PagSeguro Digital. Verisk Analytics is trading at a lower price-to-earnings ratio than PagSeguro Digital, indicating that it is currently the more affordable of the two stocks.

Summary

Verisk Analytics beats PagSeguro Digital on 8 of the 13 factors compared between the two stocks.

About Verisk Analytics

Verisk Analytics, Inc. provides data analytics solutions for customers in the insurance, energy, and financial markets in the United States and internationally. Its Decision Analytics segment develops predictive models to forecast scenarios, and produce standard and customized analytics for predicting loss, selecting and pricing risk, detecting fraud before and after a loss event, and quantifying losses. It provides fraud-detection tools for the property and casualty (P&C) insurance industry; data analytics for energy, chemicals, and metals and mining industries; and data and information services that enable enhanced compliance with environmental health and safety, as well as helps businesses and governments to anticipate and manage climate-and weather-related risks. The company's Risk Assessment segment offers solutions to P&C insurance customers and focuses on prediction of loss, and selection and pricing of risk. Its solutions include industry-standard insurance programs that help P&C insurers in defining coverage and issue policies; actuarial services to help its customers analyze and price their risks; and customized services that include assisting with the development of independent insurance programs, analysis of their own underwriting experience, development of classification systems and rating plans, and other business decisions, as well as supplies information to various customers in other markets. This segment's solutions also comprise property-specific rating and underwriting information on properties, businesses, and communities to evaluate, price, and process commercial insurance applications, including property, auto, general liability, business owner's policy, and workers compensation. The company was founded in 1971 and is headquartered in Jersey City, New Jersey.

About PagSeguro Digital

PagSeguro Digital Ltd. provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, an end-to-end digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; and Free PagSeguro digital account, which centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem. It also acquires and sells point of sale (POS) devices and other products; and offers online gaming and cross-border digital services. In addition, the company offers functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, eWallet, and its POS app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with administrators and acquirers. Additionally, the company engages in the in-person payment activities through POS devices; and issuance of prepaid cards to clients for spending or withdrawing account balances. It also provides online gaming and cross-border digital services; and operates an online platform that facilitates peer-to-peer lending. The company was founded in 2006 and is headquartered in São Paulo, Brazil. PagSeguro Digital Ltd. is a subsidiary of Universo Online S.A.

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