Analyzing Fair Isaac (NYSE:FICO) & WEX (NYSE:WEX)

WEX (NYSE:WEX) and Fair Isaac (NYSE:FICO) are both business services companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.

Institutional and Insider Ownership

97.5% of WEX shares are held by institutional investors. Comparatively, 85.8% of Fair Isaac shares are held by institutional investors. 1.1% of WEX shares are held by insiders. Comparatively, 3.5% of Fair Isaac shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

WEX has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, Fair Isaac has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for WEX and Fair Isaac, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WEX	0	5	7	1	2.69
Fair Isaac	0	4	8	0	2.67

WEX currently has a consensus price target of $235.91, indicating a potential upside of 24.30%. Fair Isaac has a consensus price target of $1,964.92, indicating a potential downside of 16.53%. Given WEX’s stronger consensus rating and higher possible upside, analysts clearly believe WEX is more favorable than Fair Isaac.

Earnings & Valuation

This table compares WEX and Fair Isaac”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WEX	$2.55 billion	2.96	$266.60 million	$7.88	24.09
Fair Isaac	$1.72 billion	33.37	$512.81 million	$20.45	115.11

Fair Isaac has lower revenue, but higher earnings than WEX. WEX is trading at a lower price-to-earnings ratio than Fair Isaac, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares WEX and Fair Isaac’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WEX	12.45%	31.35%	3.92%
Fair Isaac	29.86%	-59.47%	28.78%

Summary

Fair Isaac beats WEX on 8 of the 15 factors compared between the two stocks.

About WEX

WEX Inc. operates a commerce platform in the United States and internationally. The Mobility segment offers fleet vehicle payment solutions, transaction processing, and information management services; and provides account activation and account retention services; authorization and billing inquiries, and account maintenance services; account management; credit and collections services; merchant services; analytics solutions; and ancillary services and offerings. This segment markets its products directly and indirectly to businesses and government agencies with fleets of commercial vehicles; and indirectly through co-branded and private label relationships. The Corporate Payments segment provides payment solutions, including embedded payments; and accounts payable automation and spend management solutions. This segment also markets its products directly and indirectly to customers in travel, fintech, insurance, consumer bill pay, and media verticals. The Benefits Solutions segment offers software-as-a-service (SaaS) platform for consumer directed healthcare benefits and full-service benefit enrollment solutions. In addition, its SaaS platform includes embedded payment solutions and plan administration services for consumer-directed health benefits; COBRA accounts; and benefit enrollment and administration services. Further, it offers custodial and depository services for health savings accounts; and markets its products through third-party administrators, financial institutions, payroll providers, and health plans. The company was formerly known as Wright Express Corporation and changed its name to WEX Inc. in October 2012. WEX Inc. was founded in 1983 and is based in Portland, Maine.

About Fair Isaac

Fair Isaac Corporation develops analytic, software, and digital decisioning technologies and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Scores and Software. The Software segment provides pre-configured analytic and decision management solution designed for various business needs or processes, such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance, and marketing, as well as associated professional services. This segment also offers FICO Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by customers to address a wide range of business use cases. The Scores segment provides business-to-business scoring solutions and services for consumers that give clients access to predictive credit and other scores that can be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings. It offers FICO Customer Analytics, FICO Responsible AI, FICO Advisors, FICO Business Outcome Simulator, FICO Forecaster, FICO TRIAD Customer Manager, FICO Blaze Advisor, FICO Xpress Optimization, FICO Falcon Fraud Manager, FICO Analytics Workbench, FICO Data Orchestrator, FICO DMP Streaming, FICO Decision Optimizer, and FICO Strategy Director, as well as software implementation and configuration services. The company markets its products and services primarily through its direct sales organization and indirect channels, as well as online. The company was formerly known as Fair Isaac & Company, Inc. and changed its name to Fair Isaac Corporation in July 1992. Fair Isaac Corporation was founded in 1956 and is headquartered in Bozeman, Montana.