Clover vs PayPal Which Is a Better Investment?

Clover Health Investments Corp. and PayPal Holdings Inc. are two prominent players in the financial services industry. Clover specializes in Medicare Advantage plans, while PayPal is a leader in digital payments. Both companies have experienced significant growth in recent years, but their stock performances have varied. Clover's stock has been volatile, while PayPal's stock has been more stable and profitable for investors. In this comparison, we will analyze the differences between these two stocks and determine which may be the better investment option.

Clover or PayPal?

When comparing Clover and PayPal, 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 Clover and PayPal.

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. Clover has a dividend yield of 1.5%, while PayPal has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Clover reports a 5-year dividend growth of -3.04% year and a payout ratio of 82.77%. On the other hand, PayPal reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 Clover P/E ratio at 54.39 and PayPal's P/E ratio at 19.93. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Clover P/B ratio is 1.23 while PayPal's P/B ratio is 4.37.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Clover has seen a 5-year revenue growth of 0.25%, while PayPal's is 1.07%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Clover's ROE at 2.29% and PayPal's ROE at 21.46%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are A$0.50 for Clover and $83.38 for PayPal. Over the past year, Clover's prices ranged from A$0.36 to A$0.90, with a yearly change of 150.35%. PayPal's prices fluctuated between $53.98 and $87.47, with a yearly change of 62.04%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.