Last week, Rosenblatt Securities analyst Kenneth Hill suggested the pricing of Paypal Holdings (NASDAQ:PYPL) is more palatable than payments rival Square (NYSE:SQ), and as such makes it the easier name of the two to own. His point was well taken. But, he may be looking past a key argument in owning SQ stock over PayPal shares.
That is, Square is growing much, much faster.
That certainly doesn’t make it a safer play. Indeed, Square stock is undeniably the riskier holding of the two payments middlemen. From a risk-vs-reward perspective, though, there’s a clear place for Square shares in some portfolios.
The rich irony is, the day after Hill made the call, Square reminded the market of why — if forced to choose — investors should choose SQ stock over PayPal.