Comparing Nuvei (NASDAQ:NVEI) and Alibaba Group (NYSE:BABA)

Nuvei (NASDAQ:NVEI) and Alibaba Group (NYSE:BABA) are both business services companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, valuation and institutional ownership.

Dividends

Nuvei pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Alibaba Group pays an annual dividend of $0.98 per share and has a dividend yield of 1.3%. Nuvei pays out -1,000.0% of its earnings in the form of a dividend. Alibaba Group pays out 22.8% 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.

Volatility and Risk

Nuvei has a beta of 2.53, indicating that its share price is 153% more volatile than the S&P 500. Comparatively, Alibaba Group has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Profitability

This table compares Nuvei and Alibaba Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuvei	-0.39%	6.50%	2.69%
Alibaba Group	8.44%	12.70%	8.02%

Valuation and Earnings

This table compares Nuvei and Alibaba Group’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuvei	$1.19 billion	3.82	-$7.84 million	($0.04)	-811.00
Alibaba Group	$130.35 billion	1.47	$11.08 billion	$4.29	17.62

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

Analyst Recommendations

This is a summary of recent ratings for Nuvei and Alibaba Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuvei	0	9	9	0	2.50
Alibaba Group	0	3	13	0	2.81

Nuvei currently has a consensus target price of $32.06, suggesting a potential downside of 1.16%. Alibaba Group has a consensus target price of $108.79, suggesting a potential upside of 43.96%. Given Alibaba Group’s stronger consensus rating and higher probable upside, analysts plainly believe Alibaba Group is more favorable than Nuvei.

Insider and Institutional Ownership

42.5% of Nuvei shares are held by institutional investors. Comparatively, 13.5% of Alibaba Group shares are held by institutional investors. 20.0% of Nuvei shares are held by company insiders. Comparatively, 12.5% of Alibaba Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Alibaba Group beats Nuvei on 11 of the 16 factors compared between the two stocks.

About Nuvei

Nuvei Corporation provides payment technology solutions to merchants and partners in North America, Europe, the Middle East and Africa, Latin America, and the Asia Pacific. The company's platform enables customers to pay and/or accept payments worldwide regardless of the location, device, or preferred payment method. Its solutions comprise a fully integrated payments engine with global processing capabilities, a turnkey solution for frictionless payment experiences, and a broad suite of data-driven business intelligence tools and risk management services. The company markets and sells its products and services through direct and indirect sales, strategic platform integrations, local sales teams, and indirect partners. The company was formerly known as Pivotal Development Corporation Inc. and changed its name to Nuvei Corporation in November 2018. Nuvei Corporation was founded in 2003 and is headquartered in Montreal, Canada.

About Alibaba Group

Alibaba Group Holding Limited, through its subsidiaries, provides technology infrastructure and marketing reach to help merchants, brands, retailers, and other businesses to engage with their users and customers in the People's Republic of China and internationally. The company operates through seven segments: China Commerce, International Commerce, Local Consumer Services, Cainiao, Cloud, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao, a digital retail platform; Tmall, a third-party online and mobile commerce platform; Alimama, a monetization platform; 1688.com and Alibaba.com, which are online wholesale marketplaces; AliExpress, a retail marketplace; Lazada, Trendyol, and Daraz that are e-commerce platforms; Freshippo, a retail platform for groceries and fresh goods; and Tmall Global, an import e-commerce platform. The company also operates Cainiao Network logistic services platform; Ele.me, an on-demand delivery and local services platform; Koubei, a restaurant and local services guide platform; and Fliggy, an online travel platform. In addition, it offers pay-for-performance, in-feed, and display marketing services; and Taobao Ad Network and Exchange, a real-time online bidding marketing exchange. Further, the company provides elastic computing, storage, network, security, database, big data, and IoT services; and hardware, software license, software installation, and application development and maintenance services. Additionally, it operates Youku, an online video platform; Quark, a platform for information search, storage, and consumption; Alibaba Pictures and other content platforms that provide online videos, films, live events, news feeds, literature, music, and others; Amap, a mobile digital map, navigation, and real-time traffic information app; DingTalk, a business efficiency mobile app; and Tmall Genie smart speaker. The company was incorporated in 1999 and is based in Hangzhou, the People's Republic of China.