LendingTree (NASDAQ:TREE – Get Free Report) and Yirendai (NYSE:YRD – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.
Valuation and Earnings
This table compares LendingTree and Yirendai”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LendingTree | $1.12 billion | 0.33 | $151.31 million | $12.90 | 2.06 |
| Yirendai | $4.30 billion | 0.02 | $7.80 million | ($2.50) | -0.30 |
LendingTree has higher earnings, but lower revenue than Yirendai. Yirendai is trading at a lower price-to-earnings ratio than LendingTree, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
LendingTree has a beta of 2.04, indicating that its stock price is 104% more volatile than the S&P 500. Comparatively, Yirendai has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.
Insider and Institutional Ownership
68.3% of LendingTree shares are owned by institutional investors. Comparatively, 2.0% of Yirendai shares are owned by institutional investors. 4.0% of LendingTree shares are owned by insiders. Comparatively, 42.2% of Yirendai shares are owned 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.
Profitability
This table compares LendingTree and Yirendai’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LendingTree | 14.33% | 14.57% | 4.49% |
| Yirendai | -35.36% | -17.30% | -11.97% |
Analyst Ratings
This is a breakdown of recent ratings and price targets for LendingTree and Yirendai, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LendingTree | 0 | 2 | 5 | 0 | 2.71 |
| Yirendai | 1 | 0 | 0 | 0 | 1.00 |
LendingTree currently has a consensus target price of $61.33, indicating a potential upside of 131.18%. Given LendingTree’s stronger consensus rating and higher possible upside, analysts clearly believe LendingTree is more favorable than Yirendai.
Summary
LendingTree beats Yirendai on 12 of the 14 factors compared between the two stocks.
About LendingTree
LendingTree, Inc., through its subsidiary, operates online consumer platform in the United States. It operates through three segments: Home, Consumer, and Insurance. The Home segment offers purchase mortgage, refinance mortgage, and home equity loans and lines of credit; and real estate brokerage services. The Consumer segment provides credit cards; personal, small business, student, and auto loans; deposit accounts; and other credit products, such as debt settlement services. The Insurance segment includes information, tools, and access to insurance quote products, including home, automobile, and health and Medicare through which consumers are matched with insurance lead aggregators to obtain insurance offers and policies. In addition, the company offers QuoteWizard, a marketplace for insurance comparison; ValuePenguin, a personal finance website that offers consumers objective analysis on various financial topics from insurance to credit cards; and Stash, a consumer investing and banking platform that offers a suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back rewards program. The company was formerly known as Tree.com, Inc. and changed its name to LendingTree, Inc. in January 2015. LendingTree, Inc. was incorporated in 1996 and is based in Charlotte, North Carolina.
About Yirendai
Yiren Digital Ltd. provides financial services through an AI-powered platform in China. Its platform provides a suite of financial and lifestyle services. The company offers financial services, which provides a portfolio of loan products to borrowers; insurance brokerage services; and consumption and lifestyle services, including non-financial products and services to meet various consumer needs. It supports clients at various growth stages, addressing financing needs arising from consumption and production activities, and augmenting the well-being and security of individuals, families, and businesses. The company was formerly known as Yirendai Ltd. and changed its name to Yiren Digital Ltd. in September 2019. Yiren Digital Ltd. was founded in 2012 and is based in Beijing, the People's Republic of China. Yiren Digital Ltd. operates as a subsidiary of CreditEase Holdings (Cayman) Limited.
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