Head-To-Head Contrast: i3 Verticals (NASDAQ:IIIV) and WEX (NYSE:WEX)

WEX (NYSE:WEX) and i3 Verticals (NASDAQ:IIIV) are both business services companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, analyst recommendations, profitability, earnings and valuation.

Profitability

This table compares WEX and i3 Verticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WEX	12.45%	31.35%	3.92%
i3 Verticals	37.35%	3.88%	1.80%

Valuation & Earnings

This table compares WEX and i3 Verticals”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WEX	$2.66 billion	2.62	$266.60 million	$7.88	22.21
i3 Verticals	$229.92 million	3.49	$113.34 million	$4.45	5.38

WEX has higher revenue and earnings than i3 Verticals. i3 Verticals is trading at a lower price-to-earnings ratio than WEX, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

WEX has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500. Comparatively, i3 Verticals has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500.

Institutional & Insider Ownership

97.5% of WEX shares are held by institutional investors. Comparatively, 84.2% of i3 Verticals shares are held by institutional investors. 1.1% of WEX shares are held by insiders. Comparatively, 34.0% of i3 Verticals 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.

Analyst Ratings

This is a breakdown of current ratings for WEX and i3 Verticals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WEX	0	6	6	1	2.62
i3 Verticals	0	2	4	1	2.86

WEX presently has a consensus price target of $227.73, suggesting a potential upside of 30.14%. i3 Verticals has a consensus price target of $27.14, suggesting a potential upside of 13.43%. Given WEX’s higher possible upside, equities analysts plainly believe WEX is more favorable than i3 Verticals.

Summary

WEX beats i3 Verticals on 10 of the 14 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 i3 Verticals

i3 Verticals, Inc. provides integrated payment and software solutions primarily to the public sector and healthcare markets in the United States. It operates in two segments, Software and Services, and Merchant Services. The company offers payment processing services that enables upper and lower court case management, collections, finance and accounting, motor vehicle and carrier registration, e-filing and taxation, license plate inventory, property tax management, utility billing, professional licensing, document workflow, and law enforcement software; assists public schools in completing payment processing functions, including accepting payments for online or at school lunches, and school activities. It also provides software platforms, such as electronic healthcare records and revenue cycle management solutions; insurance adjudication, patient engagement platforms, billing, scheduling, and integrated payments solutions; and workflow software and associated professional services to medical insurance payers. In addition, the company engages in software licenses and subscriptions, transaction-based fees, ongoing software maintenance and support, and other software-related solutions; and payment processing and gateway fees, as well as other related fixed transaction or service fees. Further, it sells equipment, and offers non-software related professional services. The company offers its solutions to clients through direct sales force; distribution partners comprising independent software vendors, independent sales organizations, and value-added resellers. i3 Verticals, Inc. was founded in 2012 and is headquartered in Nashville, Tennessee.