PayPal vs Western Union Which Is More Lucrative?

PayPal and Western Union are two leading companies in the financial services industry, each offering their own unique advantages and disadvantages for investors. PayPal is a digital payment processor that has shown consistent growth and innovation in recent years, making it a popular choice among tech-savvy investors. On the other hand, Western Union is a more traditional money transfer service with a global presence, making it a stable investment option for those seeking reliable returns. Both companies face competition from emerging fintech companies, so investors must carefully consider the long-term prospects and risks associated with each stock.

PayPal or Western Union?

When comparing PayPal and Western Union, 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 PayPal and Western Union.

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. PayPal has a dividend yield of -%, while Western Union has a dividend yield of 8.65%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. PayPal reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Western Union reports a 5-year dividend growth of 4.34% year and a payout ratio of 48.10%.

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 PayPal P/E ratio at 20.80 and Western Union's P/E ratio at 5.44. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. PayPal P/B ratio is 4.57 while Western Union's P/B ratio is 5.63.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, PayPal has seen a 5-year revenue growth of 1.07%, while Western Union's is -0.05%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with PayPal's ROE at 21.46% and Western Union's ROE at 137.13%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $87.84 for PayPal and $10.82 for Western Union. Over the past year, PayPal's prices ranged from $55.77 to $93.66, with a yearly change of 67.94%. Western Union's prices fluctuated between $10.51 and $14.19, with a yearly change of 35.01%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.