2 Online Payments Stocks to Make Your Portfolio Smarter

Presently, the global economic scenario resembles a minefield with very little opportunity for profitable stock picking. Among the problems plaguing the wider capital markets include geopolitical tensions, debilitating inflation, supply chain constraints, rising interest rates and muted demand. Further, any respite from all these troubles does not seem anywhere near the horizon.

In such a scenario, TipRanks’ Smart Portfolio tool can act as a guiding force for investors looking to make profitable investment decisions. The TipRanks Smart Portfolio allows investors to benchmark their portfolios against the best performing portfolios on TipRanks and also the average TipRanks Portfolios.

Notably, the burgeoning online payments sector occupies a sizeable portion of the best performing portfolios on TipRanks. According to a report by Statista, the total transaction value in the digital payments sector is forecast to reach $1.8 trillion in 2022. Further, the total transaction value for the period 2022-2026 is expected to witness a CAGR of 15.45%. It is also likely to reach a total amount of $3.2 trillion by 2026.

Therefore, an investment in the online payments space can be an attractive choice for investors. The new and improved TipRanks Smart Portfolio picks out the proverbial diamonds from the rough and brings us two stocks that are part of the best performing portfolios. Let’s have a look at them.

Block, Inc. (NYSE: SQ)

With a market cap of $49 billion, the San Francisco, CA-based company is a financial services and digital payments company, which is spearheaded by former Twitter CEO Jack Dorsey. Earlier known as Square, the payments platform is aimed at serving small and medium businesses.

Block has an allocation of 3.33% in the Best Performing Portfolio on TipRanks.

However, the stock has been a laggard so far this year, down 48.6%, compared to the tech-heavy Nasdaq Composite Index’s decline of 25.9%.

Recently, BMO Capital analyst James Fotheringham reiterated a Buy rating on the stock with a price target of $126, which implies upside potential of 49.3% from current levels.

Overall, the stock has a Strong Buy consensus rating based on 30 Buys and five Holds. Block’s average price target of $162.15 implies upside potential of 92.1% from current levels. Shares have declined 61.8% over the past year.

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Block’s performance this quarter.

According to the tool, the Block website recorded a 29.39% monthly rise in global visits in April against the same period last year. Further, the footfall on the company’s website has increased 30.35% year-to-date, compared to the previous year.

PayPal Holdings, Inc. (NASDAQ: PYPL)

Commanding a market cap of over $91 billion, San Jose, CA-based PayPal is considered one of the pioneers in the digital payments space. Established in 1998, the company operates as a payment processor for online vendors, auction sites and many other commercial users.

PayPal has an allocation of 4.51% in the Best Performing Portfolio on TipRanks.

Yet, the stock has been a laggard so far this year, declining a massive 59.6%, compared to the tech-heavy Nasdaq Composite Index’s decline of 25.9%.

Recently, Barclays analyst Ramsey El Assal reiterated a Buy rating on the stock with a price target of $125, which implies upside potential of 58.7% from current levels.

Overall, the Street has a Strong Buy consensus rating on the stock based on 27 Buys, five Holds and one Sell. PYPL’s average price target of $129.06 implies upside potential of 63.9% from current levels. Shares have declined 68.3% over the past year.

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings, the world’s biggest website usage monitoring service, offers insight into PayPal’s performance this quarter.

According to the tool, the PayPal website recorded a 63.47% monthly rise in global visits in April against the same period last year. Further, the footfall on the company’s website has grown 105.52% year-to-date, compared to the previous year.

Key Takeaways

Although the sector has been witnessing a decline in the recent past due to the prevailing uncertainties and the larger sell-off in the technology space, the online payments sector is expected to thrive in the coming years. Consequently, investors can ride this growth by considering the aforementioned stocks, which occupy a notable position among the best performing portfolios on TipRanks and seem to be well-positioned to gain from the ensuing tailwinds in the sector.

Discover new investment ideas with data you can trust.