Lendingclub (NASDAQ:HAPN) versus Ally Financial (NYSE:ALLY) Head to Head Comparison

Ally Financial (NYSE:ALLY) and Lendingclub (NASDAQ:HAPN) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Volatility and Risk

Ally Financial has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Lendingclub has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Ally Financial and Lendingclub, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ally Financial	1	4	11	1	2.71
Lendingclub	0	1	2	0	2.67

Ally Financial presently has a consensus target price of $50.00, suggesting a potential upside of 32.70%. Lendingclub has a consensus target price of $25.00, suggesting a potential upside of 72.53%. Given Lendingclub’s higher possible upside, analysts plainly believe Lendingclub is more favorable than Ally Financial.

Earnings & Valuation

This table compares Ally Financial and Lendingclub”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ally Financial	$7.91 billion	1.45	$852.00 million	$4.24	8.89
Lendingclub	$998.85 million	1.67	$135.68 million	$1.66	8.73

Ally Financial has higher revenue and earnings than Lendingclub. Lendingclub is trading at a lower price-to-earnings ratio than Ally Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ally Financial and Lendingclub’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ally Financial	16.75%	11.75%	0.79%
Lendingclub	18.67%	12.92%	1.66%

Institutional & Insider Ownership

88.8% of Ally Financial shares are owned by institutional investors. Comparatively, 74.1% of Lendingclub shares are owned by institutional investors. 0.5% of Ally Financial shares are owned by insiders. Comparatively, 3.3% of Lendingclub shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Lendingclub beats Ally Financial on 8 of the 15 factors compared between the two stocks.

About Ally Financial

Ally Financial Inc., a digital financial-services company, provides various digital financial products and services in the United States, Canada, and Bermuda. The company operates through Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations segments. The Automotive Finance Operations segment offers automotive financing services, including providing retail installment sales contracts, loans and operating leases, term loans to dealers, financing dealer floorplans and other lines of credit to dealers, warehouse lines to automotive retailers, and fleet financing. It also provides financing services to companies and municipalities for the purchase or lease of vehicles, and vehicle-remarketing services. The Insurance Operations segment offers consumer finance protection and insurance products through the automotive dealer channel, and commercial insurance products directly to dealers. This segment provides vehicle service and maintenance contract, and guaranteed asset protection products; and underwrites commercial insurance coverages, which primarily insure dealers’ vehicle inventory. The Mortgage Finance Operations segment manages consumer mortgage loan portfolio that includes bulk purchases of jumbo and low-to-moderate income mortgage loans originated by third parties, as well as direct-to-consumer mortgage offerings. The Corporate Finance Operations segment provides senior secured leveraged cash flow and asset-based loans to middle market companies; leveraged loans; and commercial real estate product to serve companies in the nursing facilities, senior housing, and medical office buildings. It also offers commercial banking products and services. In addition, it provides securities brokerage and investment advisory services. The company was formerly known as GMAC Inc. and changed its name to Ally Financial Inc. in May 2010. Ally Financial Inc. was founded in 1919 and is based in Detroit, Michigan.

About Lendingclub

LendingClub Corporation, operates as a bank holding company for LendingClub Bank, National Association that provides range of financial products and services through a technology-driven platform in the United States. The company provides commercial and industrial, commercial real estate, small business, and equipment loans, as well as leases equipment; and unsecured personal and auto, patient finance, and education finance loans. It also operates an online lending marketplace platform that connects borrowers and investors. LendingClub Corporation was incorporated in 2006 and is headquartered in San Francisco, California.