Neostellar Capital (NASDAQ:NSLR) vs. PayPal (NASDAQ:PYPL) Critical Survey

PayPal (NASDAQ:PYPL) and Neostellar Capital (NASDAQ:NSLR) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Volatility & Risk

PayPal has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Neostellar Capital has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Insider and Institutional Ownership

68.3% of PayPal shares are owned by institutional investors. Comparatively, 13.0% of Neostellar Capital shares are owned by institutional investors. 0.6% of PayPal shares are owned by insiders. Comparatively, 8.3% of Neostellar Capital shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

PayPal pays an annual dividend of $0.56 per share and has a dividend yield of 1.0%. Neostellar Capital pays an annual dividend of $0.25 per share and has a dividend yield of 3.5%. PayPal pays out 10.6% of its earnings in the form of a dividend. Neostellar Capital pays out 6.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Neostellar Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares PayPal and Neostellar Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PayPal	14.36%	24.39%	6.06%
Neostellar Capital	6,053.56%	-12.63%	-10.14%

Analyst Recommendations

This is a summary of current ratings and recommmendations for PayPal and Neostellar Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PayPal	4	34	9	0	2.11
Neostellar Capital	0	1	4	1	3.00

PayPal presently has a consensus target price of $56.28, indicating a potential upside of 0.19%. Neostellar Capital has a consensus target price of $14.25, indicating a potential upside of 100.42%. Given Neostellar Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Neostellar Capital is more favorable than PayPal.

Valuation & Earnings

This table compares PayPal and Neostellar Capital”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PayPal	$33.17 billion	1.45	$5.23 billion	$5.29	10.62
Neostellar Capital	$1.69 million	111.36	$48.81 million	$4.03	1.76

PayPal has higher revenue and earnings than Neostellar Capital. Neostellar Capital is trading at a lower price-to-earnings ratio than PayPal, indicating that it is currently the more affordable of the two stocks.

Summary

Neostellar Capital beats PayPal on 9 of the 16 factors compared between the two stocks.

About PayPal

PayPal Holdings, Inc. operates a technology platform that enables digital payments on behalf of merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers that enables its customers to connect, transact, and send and receive payments through online and in person, as well as transfer and withdraw funds using various funding sources, such as bank accounts, PayPal or Venmo account balance, PayPal and Venmo branded credit products comprising its installment products, credit and debit cards, and cryptocurrencies, as well as other stored value products, including gift cards and eligible rewards. The company provides payment solutions under the PayPal, PayPal Credit, Braintree, Venmo, Xoom, Zettle, Hyperwallet, Honey, and Paidy names. The company was founded in 1998 and is headquartered in San Jose, California.

About Neostellar Capital

SuRo Capital Corp. is a business development company. The firm seeks to invest in growing, late stage, venture capital-backed private companies. SuRo Capital Corp. was founded in 2010 and is based in San Francisco, California.