LexinFintech (NASDAQ:LX) and Chesswood Group (OTCMKTS:CHWWF) Head to Head Review

LexinFintech (NASDAQ:LX) and Chesswood Group (OTCMKTS:CHWWF) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Profitability

This table compares LexinFintech and Chesswood Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LexinFintech	10.78%	12.12%	6.29%
Chesswood Group	N/A	N/A	N/A

Dividends

LexinFintech pays an annual dividend of $0.30 per share and has a dividend yield of 22.6%. Chesswood Group pays an annual dividend of $0.78 per share. LexinFintech pays out 26.1% of its earnings in the form of a dividend. Chesswood Group pays out 85.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. LexinFintech is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

12.6% of Chesswood Group shares are held by institutional investors. 27.8% of LexinFintech shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares LexinFintech and Chesswood Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LexinFintech	$1.88 billion	0.12	$239.82 million	$1.15	1.16
Chesswood Group	N/A	N/A	N/A	$0.91	N/A

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for LexinFintech and Chesswood Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LexinFintech	1	1	0	0	1.50
Chesswood Group	0	0	0	0	0.00

LexinFintech currently has a consensus target price of $3.50, suggesting a potential upside of 163.16%. Given LexinFintech’s stronger consensus rating and higher probable upside, analysts plainly believe LexinFintech is more favorable than Chesswood Group.

Summary

LexinFintech beats Chesswood Group on 10 of the 12 factors compared between the two stocks.

About LexinFintech

LexinFintech Holdings Ltd., through its subsidiaries, provides online consumer finance services in the People's Republic of China. The company operates Fenqile.com, an online consumption and consumer finance platform that offers installment purchase and personal installment loans, as well as online direct sales with installment payment terms; and Le Hua Card, a scenario-based lending. It also provides technology-driven platform services for financial institution customers and partners to increase revenues, manage financial risks, enhance operating efficiency and service quality, enhance collections, and reduce overall costs; Maiya application, a location-based services shopping experience with buy-now and pay-later options; and Juzi Licai, an online investment platform. In addition, the company offers technical support and consulting, software development, financing guarantee, and financial technology services. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People's Republic of China.

About Chesswood Group

Chesswood Group Limited operates primarily in the specialty finance industry in North America. The company offers micro and small-ticket commercial equipment financing and origination to small and medium-sized businesses through the third-party broker and equipment vendor channels; and commercial equipment financing and loans to small and medium-sized businesses. It also provides home improvement and other consumer financing solutions; credit alternatives to investors; consumer financing for motor vehicle purchasers; and specialized financing solutions. The company was formerly known as Chesswood Income Fund and changed its name to Chesswood Group Limited in January 2011. Chesswood Group Limited was founded in 1982 and is headquartered in Toronto, Canada.