Lendingtree (NASDAQ:TREE) and PPDAI Group (NYSE:PPDF) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Lendingtree and PPDAI Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lendingtree 12.73% 12.86% 6.08%
PPDAI Group 25.95% 36.22% 12.34%

Institutional and Insider Ownership

83.9% of Lendingtree shares are held by institutional investors. Comparatively, 6.1% of PPDAI Group shares are held by institutional investors. 20.5% of Lendingtree shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Lendingtree and PPDAI Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lendingtree $617.74 million 4.91 $15.57 million $3.02 78.34
PPDAI Group $596.44 million 2.78 $166.44 million N/A N/A

PPDAI Group has lower revenue, but higher earnings than Lendingtree.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Lendingtree and PPDAI Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lendingtree 1 6 8 0 2.47
PPDAI Group 0 2 2 0 2.50

Lendingtree currently has a consensus price target of $335.27, suggesting a potential upside of 41.70%. PPDAI Group has a consensus price target of $12.00, suggesting a potential upside of 117.79%. Given PPDAI Group’s stronger consensus rating and higher probable upside, analysts clearly believe PPDAI Group is more favorable than Lendingtree.

Summary

PPDAI Group beats Lendingtree on 6 of the 11 factors compared between the two stocks.

About Lendingtree

LendingTree, Inc. engages in the operation of online loan marketplace for consumers seeking loans and other credit-based offerings. It provides mortgage loans, home equity, reverse mortgage, auto loans, credit cards, personal loans, student loans, and small business loans. The company was founded Douglas Lebda in April 2008 and is headquartered in Charlotte, NC.

About PPDAI Group

PPDAI Group Inc., an investment holding company, operates an online consumer finance marketplace through its platform in the People's Republic of China. It provides services to match borrowers with investors and facilitate loan transactions on its marketplace through the lifecycle of loans. The company offers standard and other loan products; and investment services to investors. As of December 31, 2017, it had approximately 65 million cumulative registered users. The company was founded in 2007 and is headquartered in Shanghai, the People's Republic of China.

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