Visa vs Affirm Which Is More Profitable?

Visa and Affirm are two major players in the financial services industry, but they operate in different segments. Visa is a global payments technology company, while Affirm is a fintech company that specializes in point-of-sale financing. Both companies have seen growth in recent years, but their stock performances have differed. Visa has a long history of stable growth and dividends, while Affirm is a newer, high-growth stock with potential for greater returns but also more volatility. Investors should consider their risk tolerance and investment goals when choosing between Visa and Affirm stocks.

Visa or Affirm?

When comparing Visa and Affirm, 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 Visa and Affirm.

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. Visa has a dividend yield of 0.5%, while Affirm has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Visa reports a 5-year dividend growth of 16.27% year and a payout ratio of 21.36%. On the other hand, Affirm 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 Visa P/E ratio at 31.48 and Affirm's P/E ratio at -40.52. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Visa P/B ratio is 15.88 while Affirm's P/B ratio is 6.38.

Growth Investors:

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

Retail Investors:

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