Contrasting World Acceptance (NASDAQ:WRLD) & PPDAI Group (NYSE:FINV)

PPDAI Group (NYSE:FINV) and World Acceptance (NASDAQ:WRLD) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Insider & Institutional Ownership

31.1% of PPDAI Group shares are owned by institutional investors. Comparatively, 83.6% of World Acceptance shares are owned by institutional investors. 44.0% of PPDAI Group shares are owned by insiders. Comparatively, 38.0% of World Acceptance shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for PPDAI Group and World Acceptance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PPDAI Group	0	1	0	0	2.00
World Acceptance	0	2	0	0	2.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PPDAI Group	16.58%	14.22%	9.15%
World Acceptance	6.71%	12.13%	4.00%

Earnings and Valuation

This table compares PPDAI Group and World Acceptance”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PPDAI Group	$1.94 billion	0.55	$363.56 million	$1.19	3.72
World Acceptance	$585.74 million	1.47	$34.59 million	$8.46	21.81

PPDAI Group has higher revenue and earnings than World Acceptance. PPDAI Group is trading at a lower price-to-earnings ratio than World Acceptance, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

PPDAI Group has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, World Acceptance has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Summary

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

About PPDAI Group

FinVolution Group operates in the online consumer finance industry. The company operates a fintech platform that is empowered by borrowers with financial institutions. It operates in China and internationally. The company was formerly known as PPDAI Group Inc. and changed its name to FinVolution Group in November 2019. FinVolution Group was founded in 2007 and is headquartered in Shanghai, the People’s Republic of China.

About World Acceptance

World Acceptance Corporation engages in consumer finance business in the United States. The company provides short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It offers income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.