Analyzing OLO (NYSE:OLO) & Western Union (NYSE:WU)

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

Insider & Institutional Ownership

91.8% of Western Union shares are owned by institutional investors. Comparatively, 93.4% of OLO shares are owned by institutional investors. 0.9% of Western Union shares are owned by company insiders. Comparatively, 39.3% of OLO shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Western Union and OLO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western Union	16.07%	120.39%	7.44%
OLO	-5.89%	0.34%	0.30%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Western Union and OLO, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western Union	2	8	0	0	1.80
OLO	0	1	2	0	2.67

Western Union presently has a consensus target price of $12.63, indicating a potential upside of 20.93%. OLO has a consensus target price of $8.67, indicating a potential upside of 13.59%. Given Western Union’s higher possible upside, analysts plainly believe Western Union is more favorable than OLO.

Earnings and Valuation

This table compares Western Union and OLO”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western Union	$4.20 billion	0.84	$626.00 million	$1.95	5.35
OLO	$271.87 million	4.59	-$58.29 million	($0.10)	-76.30

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

Risk and Volatility

Western Union has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, OLO has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Summary

Western Union beats OLO on 8 of the 14 factors compared between the two stocks.

About Western Union

The Western Union Company provides money movement and payment services worldwide. The company operates through Consumer Money Transfer and Consumer Services segments. The Consumer Money Transfer segment facilitates money transfers for international cross-border and intra-country transfers, primarily through a network of retail agent locations, as well as through websites and mobile devices. The Consumer Services segments offers bill payment services, which facilitate payments for consumers, businesses, and other organizations, as well as money order services, retail foreign exchange services, prepaid cards, lending partnerships, and digital wallets. The company was founded in 1851 and is headquartered in Denver, Colorado.

About OLO

Olo Inc. operates an open SaaS platform for restaurants in the United States. The company’s platform enables on-demand digital commerce operations, which cover digital ordering, delivery, front-of-house management, and payments. Its solutions include Order, a suite of solutions powering restaurant brands’ on-demand commerce operations, enabling digital ordering, delivery, and channel management through ordering, dispatch, rails, switchboard, network, virtual brands, kiosk, catering, and sync modules; Engage, a suite of restaurant-centric marketing solutions optimizing guest lifetime value by strengthening and enhancing the restaurants’ direct guest relationships, through the guest data platform, marketing, sentiment, and host modules; and Pay, a frictionless payment platform that enables restaurants to grow and protect their digital business through customer payment experience that offers advanced fraud prevention to improve authorization rates for valid transactions, and increase basket conversion through its Olo Pay module. The company was formerly known as Mobo Systems, Inc. and changed its name to Olo Inc. in January 2020. Olo Inc. was incorporated in 2005 and is headquartered in New York, New York.