Nuvei (TSX:NVEI) and Canadian Utilities (TSX:CU) are two shares that couldn’t be extra dissimilar. On the one hand, now we have a fintech upstart that’s attempting to make headway within the aggressive funds trade. Alternatively, now we have (because the identify implies) a Canadian utility firm that operates in probably the most mature and established industries on the planet. The distinction couldn’t be extra stark.

It’s exactly for that reason that Nuvei and Canadian Utilities are value evaluating. These shares completely signify completely different investing types — particularly, progress investing and dividend investing. Though you’d by no means maintain these shares for a similar causes as each other, you might find yourself proudly owning each in case you put money into TSX index funds. So, they’re value evaluating. On this article, I’ll discover each Nuvei and Canadian Utilities intimately so as to resolve which inventory is best for you.

The case for Nuvei

Nuvei is classed as a progress inventory, and, as you would possibly anticipate, it has … excessive progress — no less than on the subject of income. In its most up-to-date quarter, NVEI delivered the next:

• $48.2 billion in funds quantity, up 78%
• $305 million in income, up 55%
• $110 million in earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA), up 36%
• -$0.14 in earnings per share, down from a optimistic determine

As you possibly can see, the earnings progress was unfavourable, however the excessive top-line progress factors to the potential for higher outcomes sooner or later. The corporate claims that its web loss within the third quarter (Q3) was associated to it drawing down cash from its revolving credit score facility within the interval. If it doesn’t draw down extra funds going ahead, then it ought to be capable to begin rising its earnings in addition to its income.

NVEI’s three-year common progress charges are fairly good. During the last three years, the corporate has grown its income, EBITDA and EBIT (earnings earlier than curiosity and taxes) on the following compounded annual (CAGR) charges:

• Income: 47%.
• EBITDA: 19.4%.
• EBIT: 19.9%.

That’s phenomenal progress. Even when the corporate’s income progress decelerates, it ought to ultimately be a a lot bigger firm than it’s immediately. As an additional plus, the corporate’s inventory just isn’t even that costly for a progress inventory, buying and selling at 14 instances earnings.

The case for Canadian Utilities

The case for Canadian Utilities rests on its stability. During the last 10 years, the corporate’s income and earnings have grown solely barely. Nevertheless, the 17% revenue margin and 82% payout ratio are ample to make sure CU’s dividends, no less than, hold coming in over the long run. Talking of which, CU inventory has a 5.86% dividend yield, which implies that you’ll gather $5,860 per 12 months in case you make investments $100,000 within the inventory, offered the dividend isn’t lower.

Will it’s lower?

It doesn’t look probably. An 82% payout ratio means an organization’s dividends are lower than its revenue, and CU’s standing as a regulated utility ensures a gradual circulate of income. On the entire, CU ought to work fairly effectively as an earnings funding.

Silly takeaway

Given the selection, I’d want to put money into Canadian Utilities relatively than Nuvei. I don’t personal both inventory, however Nuvei is way much less confirmed, having solely turned worthwhile not too long ago. That doesn’t imply it gained’t carry out effectively; it’s simply that it’s onerous to give you a selected forecast of its future.