Palo Alto Networks (PANW) vs. Mastercard (MA) Head to Head Analysis

Palo Alto Networks (NYSE: PANW) and Mastercard (NYSE:MA) are both large-cap internet security & transactions services companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Palo Alto Networks and Mastercard, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Palo Alto Networks 1 11 29 0 2.68
Mastercard 0 1 27 0 2.96

Palo Alto Networks currently has a consensus target price of $161.18, suggesting a potential upside of 16.61%. Mastercard has a consensus target price of $159.11, suggesting a potential upside of 7.27%. Given Palo Alto Networks’ higher possible upside, equities analysts clearly believe Palo Alto Networks is more favorable than Mastercard.

Dividends

Mastercard pays an annual dividend of $0.88 per share and has a dividend yield of 0.6%. Palo Alto Networks does not pay a dividend. Mastercard pays out 20.5% of its earnings in the form of a dividend. Palo Alto Networks has increased its dividend for 5 consecutive years.

Earnings & Valuation

This table compares Palo Alto Networks and Mastercard’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Palo Alto Networks $1.76 billion 7.22 -$216.60 million ($2.39) -57.83
Mastercard $10.78 billion 14.57 $4.06 billion $4.29 34.58

Mastercard has higher revenue and earnings than Palo Alto Networks. Palo Alto Networks is trading at a lower price-to-earnings ratio than Mastercard, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Palo Alto Networks has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Mastercard has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Profitability

This table compares Palo Alto Networks and Mastercard’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Palo Alto Networks -12.57% -19.72% -4.89%
Mastercard 38.70% 78.38% 23.78%

Insider and Institutional Ownership

77.5% of Palo Alto Networks shares are owned by institutional investors. Comparatively, 76.2% of Mastercard shares are owned by institutional investors. 4.8% of Palo Alto Networks shares are owned by company insiders. Comparatively, 0.3% of Mastercard shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Mastercard beats Palo Alto Networks on 10 of the 16 factors compared between the two stocks.

About Palo Alto Networks

Palo Alto Networks, Inc. offers a next-generation security platform. The Company’s security platform consists of three elements: Next-Generation Firewall, Advanced Endpoint Protection and Threat Intelligence Cloud. Its Next-Generation Firewall delivers application, user and content visibility and control, as well as protection against network-based cyber threats integrated within the firewall through its hardware and software architecture. Its Advanced Endpoint Protection prevents cyber attacks that run malicious code or exploit software vulnerabilities on a range of fixed and virtual endpoints and servers. Its Threat Intelligence Cloud provides central intelligence capabilities, security for software as a service applications and automated delivery of preventative measures against cyber attacks. Its products and services include firewall appliances, panorama, virtual system upgrades, subscription services, support and maintenance, and professional services.

About Mastercard

MasterCard Incorporated is a technology company that connects consumers, financial institutions, merchants, governments and businesses across the world, enabling them to use electronic forms of payment. The Company operates through Payment Solutions segment. The Company allows user to make payments by creating a range of payment solutions and services using its brands, which include MasterCard, Maestro and Cirrus. The Company provides a range of products and solutions that support payment products, which customers can offer to their cardholders. The Company’s services facilitate transactions on its network among cardholders, merchants, financial institutions and governments. The Company’s products include consumer credit and charge, commercial, debit, prepaid, commercial and digital. The Company’s consumer credit and charge offers a range of programs that enables issuers to provide consumers with cards allowing users to defer payment.

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