Reviewing XP (XP) and The Competition

XP (NASDAQ:XP) is one of 1,746 publicly-traded companies in the “Capital Markets” industry, but how does it contrast to its rivals? We will compare XP to related companies based on the strength of its institutional ownership, dividends, earnings, analyst recommendations, profitability, risk and valuation.

Dividends

XP pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. XP pays out 20.9% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 29.2% of their earnings in the form of a dividend.

Institutional & Insider Ownership

59.2% of XP shares are owned by institutional investors. Comparatively, 30.6% of shares of all “Capital Markets” companies are owned by institutional investors. 13.1% of shares of all “Capital Markets” companies 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.

Volatility and Risk

XP has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, XP’s rivals have a beta of 0.79, indicating that their average share price is 21% less volatile than the S&P 500.

Profitability

This table compares XP and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
XP	27.20%	22.19%	1.33%
XP Competitors	314.79%	9.90%	3.46%

Earnings and Valuation

This table compares XP and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
XP	$8.42 billion	$925.91 million	7.86
XP Competitors	$3.12 billion	$397.40 million	15.77

XP has higher revenue and earnings than its rivals. XP is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of recent ratings and recommmendations for XP and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
XP	0	5	5	0	2.50
XP Competitors	5605	20212	22565	650	2.37

XP currently has a consensus target price of $24.86, suggesting a potential upside of 65.49%. As a group, “Capital Markets” companies have a potential upside of 23.13%. Given XP’s stronger consensus rating and higher possible upside, equities research analysts plainly believe XP is more favorable than its rivals.

Summary

XP beats its rivals on 9 of the 15 factors compared.

XP Company Profile

XP Inc. is a Brazil-based financial services company that operates a digital investment platform. It offers individuals and businesses access to investment products and services, including brokerage, investment advice and wealth management. The company has expanded beyond investing into banking, credit, insurance and asset management. Its businesses include the XP, Rico and Clear platforms, which serve customers with different investment needs and preferences. Founded in 2001 as an investment advisory business, XP has grown into a broad financial services provider focused primarily on the Brazilian market.