Affirm vs Visa Which Outperforms?

Affirm and Visa are two prominent companies in the financial services sector, each with a unique focus on consumer payment solutions. Affirm, as a leading fintech company, offers alternative financing options for online purchases, disrupting the traditional credit card model. Visa, on the other hand, is a global payments technology company that facilitates electronic funds transfers worldwide. Investors looking to diversify their portfolios may consider the contrasting dynamics of Affirm's growth potential and Visa's stable market presence when evaluating these stocks.

Affirm or Visa?

When comparing Affirm and Visa, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Affirm and Visa.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Affirm has a dividend yield of -%, while Visa has a dividend yield of 0.5%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Affirm reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Visa reports a 5-year dividend growth of 16.27% year and a payout ratio of 21.36%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Affirm P/E ratio at -40.52 and Visa's P/E ratio at 31.48. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Affirm P/B ratio is 6.38 while Visa's P/B ratio is 15.88.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Affirm has seen a 5-year revenue growth of 4.24%, while Visa's is 0.73%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Affirm's ROE at -16.49% and Visa's ROE at 49.64%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $47.98 for Affirm and $309.30 for Visa. Over the past year, Affirm's prices ranged from $21.88 to $57.76, with a yearly change of 163.99%. Visa's prices fluctuated between $244.11 and $312.39, with a yearly change of 27.97%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.