PagSeguro Digital (NYSE:PAGS) and Sohu.com (NASDAQ:SOHU) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Profitability

This table compares PagSeguro Digital and Sohu.com’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PagSeguro Digital N/A N/A N/A
Sohu.com -8.50% -10.05% -4.88%

Institutional and Insider Ownership

59.5% of Sohu.com shares are held by institutional investors. 21.1% of Sohu.com shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares PagSeguro Digital and Sohu.com’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PagSeguro Digital $790.32 million 3.57 $149.95 million $0.57 40.21
Sohu.com $1.88 billion 0.44 -$160.08 million ($4.13) -5.16

PagSeguro Digital has higher earnings, but lower revenue than Sohu.com. Sohu.com is trading at a lower price-to-earnings ratio than PagSeguro Digital, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for PagSeguro Digital and Sohu.com, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PagSeguro Digital 1 3 8 0 2.58
Sohu.com 0 0 0 0 N/A

PagSeguro Digital currently has a consensus price target of $33.47, indicating a potential upside of 46.03%. Given PagSeguro Digital’s higher possible upside, research analysts plainly believe PagSeguro Digital is more favorable than Sohu.com.

Summary

PagSeguro Digital beats Sohu.com on 9 of the 12 factors compared between the two stocks.

About PagSeguro Digital

PagSeguro Digital Ltd. provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company’s products and services include PagSeguro Ecosystem, an end-to-end digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; and Free PagSeguro digital account, which centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem. It also acquires and sells point of sale (POS) devices and other products; and offers online gaming and cross-border digital services. In addition, the company offers functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, eWallet, and its POS app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with administrators and acquirers. Additionally, the company engages in the in-person payment activities through POS devices; and issuance of prepaid cards to clients for spending or withdrawing account balances. It also provides online gaming and cross-border digital services; and operates an online platform that facilitates peer-to-peer lending. The company was founded in 2006 and is headquartered in São Paulo, Brazil. PagSeguro Digital Ltd. is a subsidiary of Universo Online S.A.

About Sohu.com


Sohu.com Inc. provides online media, search, and game services on personal computers (PCs), mobile devices, and tablets in the People’s Republic of China. The company operates sohu.com, which provides online news and information; Sohu News APP, a mobile phone application, as well as m.sohu.com mobile portal; tv.sohu.com that offers online video content and service, as well as Sohu Video APP, a mobile phone application; and focus.cn, which provides online real estate information and services. It also offers paid subscription services, interactive broadcasting services, and sub-licensing of purchased video content to third parties. The company’s search and search-related business provides Sogou Search, which makes information accessible for Chinese Internet users; Sogou Input Method, a cloud-based Chinese language input software for PC and mobile users; Sogou Browser for Web navigation; Sogou Web Directory, a content aggregation and distribution platform; and Sogou Translation to deliver language translation, as well as offers pay-for-click and other online advertising services for advertisers. In addition, its online game business offers PC games, mobile games, and Web games to game players. Further, the company’s platform channel business operates 17173.com Website, a game information portal; RaidCall, which provides online music and entertainment services; and MoboTap that offers software applications for PCs and mobile devices through the Dolphin Browser, a gateway to a host of user activities on mobile devices, as well as online card and board games. Additionally, it provides Internet value-added services; and cinema advertising services. The company was formerly known as Internet Technologies China Incorporated and changed its name to Sohu.com Inc. in September 1999. Sohu.com Inc. was founded in 1996 and is headquartered in Beijing, the People’s Republic of China.



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