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PayPal Holdings, Inc. (PYPL) vs Visa Inc. (V)

PayPal Holdings, Inc. and Visa Inc. are both Credit Services companies. Visa Inc. is the larger, with a market value of $746.4B against $48.9B — 15.3× the size. PayPal Holdings, Inc. trades at the lower P/E: 10.6× against 33.0×. Visa Inc. grew revenue faster over the last twelve months: 14.4% against 5.69%. Visa Inc. has the higher net margin (50.8% vs 14.4%) and the higher return on invested capital (38.0% vs 16.9%). Both pay a dividend; PayPal Holdings, Inc. yields more (0.99% vs 0.67%). Across the 21 metrics below, PayPal Holdings, Inc. leads on 11 and Visa Inc. on 10.

Valuation

Metric PYPL V Credit Services median
P/E 10.64 32.97 9.39
P/S 1.46 16.12 0.86
P/B 2.51 20.69 1.16
Price to free cash flow 7.53 34.12 2.78
EV/EBITDA — — —
EV/Sales — — —
Earnings yield 9.40% 3.03% 6.55%
Free cash flow yield 13.28% 2.93% 12.26%

Profitability

Metric PYPL V Credit Services median
Gross margin 40.48% 100.00% 77.13%
Operating margin 17.42% 60.68% 0.34%
Net margin 14.36% 50.78% 9.25%
Free cash flow margin 19.35% 47.23% 12.91%
Return on equity 24.50% 62.36% 8.49%
Return on assets 6.03% 23.22% 2.16%
Return on invested capital 16.92% 38.04% 4.09%

Growth

Metric PYPL V Credit Services median
Revenue growth (TTM) 5.69% 14.39% 4.62%
EPS growth (last fiscal year) 35.59% 4.83% 21.94%
Revenue growth, 5-year CAGR 9.11% 12.86% 9.13%
Net income growth, 5-year CAGR 4.49% 13.04% 0.00%

Health

Metric PYPL V Credit Services median
Debt to equity 0.68 0.68 0.68
Current ratio 1.29 0.99 1.55
Net debt to EBITDA (0.06) 0.13 0.13

Dividend

Metric PYPL V Credit Services median
Dividend yield 0.99% 0.67% 1.64%
Payout ratio 0.11 0.23 0.22

Size

Metric PYPL V Credit Services median
Market cap 48.90b 746.35b 751.08m

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