Wells Fargo & Company (NYSE:WFC) versus Robinhood Markets (NASDAQ:HOOD) Head-To-Head Analysis

Wells Fargo & Company (NYSE:WFC) and Robinhood Markets (NASDAQ:HOOD) are both large-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Wells Fargo & Company and Robinhood Markets’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wells Fargo & Company	16.19%	12.15%	1.03%
Robinhood Markets	48.77%	15.42%	3.37%

Volatility and Risk

Wells Fargo & Company has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Robinhood Markets has a beta of 2.36, meaning that its stock price is 136% more volatile than the S&P 500.

Institutional & Insider Ownership

75.9% of Wells Fargo & Company shares are owned by institutional investors. Comparatively, 93.3% of Robinhood Markets shares are owned by institutional investors. 0.1% of Wells Fargo & Company shares are owned by insiders. Comparatively, 14.5% of Robinhood Markets shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Wells Fargo & Company and Robinhood Markets”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wells Fargo & Company	$125.40 billion	2.14	$19.72 billion	$5.57	14.78
Robinhood Markets	$3.26 billion	25.39	$1.41 billion	$1.76	53.10

Wells Fargo & Company has higher revenue and earnings than Robinhood Markets. Wells Fargo & Company is trading at a lower price-to-earnings ratio than Robinhood Markets, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for Wells Fargo & Company and Robinhood Markets, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wells Fargo & Company	0	8	11	1	2.65
Robinhood Markets	1	6	12	0	2.58

Wells Fargo & Company presently has a consensus target price of $78.33, suggesting a potential downside of 4.88%. Robinhood Markets has a consensus target price of $72.71, suggesting a potential downside of 22.21%. Given Wells Fargo & Company’s stronger consensus rating and higher possible upside, research analysts plainly believe Wells Fargo & Company is more favorable than Robinhood Markets.

Summary

Robinhood Markets beats Wells Fargo & Company on 9 of the 15 factors compared between the two stocks.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.

About Robinhood Markets

Robinhood Markets, Inc. operates financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds (ETFs), American depository receipts, options, gold, and cryptocurrencies. The company offers fractional trading, recurring investments, fully-paid securities lending, access to investing on margin, cash sweep, instant withdrawals, retirement program, around-the-clock trading, and initial public offerings participation services. It also provides various learning and education solutions comprise Snacks, an accessible digest of business news stories for a new generation of investors.; Learn, which is an online collection of beginners' guides, feature tutorials, and financial dictionary; Newsfeeds that offer access to free, premium news from sites from various sites, such as Barron's, Reuters, and Dow Jones. In addition, the company offers In-App Education, a resource that covers investing fundamentals, including why people invest, a stock market overview, and tips on how to define investing goals, as well as allows customers to understand the basics of investing before their first trade; and Crypto Learn and Earn, an educational module available to various crypto customers through Robinhood Learn to teach customers the basics related to cryptocurrency. Further, it provides Robinhood credit cards, cash card and spending accounts, and wallets. Robinhood Markets, Inc. was incorporated in 2013 and is headquartered in Menlo Park, California.