loanDepot (NYSE:LDI) and Kingsway Financial Services (NYSE:KWY) Head-To-Head Contrast

Kingsway Financial Services (NYSE:KWY) and loanDepot (NYSE:LDI) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitability.

Volatility & Risk

Kingsway Financial Services has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500. Comparatively, loanDepot has a beta of 3.56, meaning that its share price is 256% more volatile than the S&P 500.

Valuation & Earnings

This table compares Kingsway Financial Services and loanDepot”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kingsway Financial Services	$134.97 million	1.72	-$10.73 million	($0.30)	-26.70
loanDepot	$1.19 billion	0.18	-$62.65 million	($0.30)	-2.08

Kingsway Financial Services has higher earnings, but lower revenue than loanDepot. Kingsway Financial Services is trading at a lower price-to-earnings ratio than loanDepot, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Kingsway Financial Services and loanDepot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kingsway Financial Services	-6.53%	-63.24%	-4.41%
loanDepot	-5.52%	-28.25%	-1.56%

Insider & Institutional Ownership

72.4% of Kingsway Financial Services shares are held by institutional investors. Comparatively, 39.4% of loanDepot shares are held by institutional investors. 41.4% of Kingsway Financial Services shares are held by insiders. Comparatively, 65.9% of loanDepot shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Kingsway Financial Services and loanDepot, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kingsway Financial Services	1	0	0	0	1.00
loanDepot	2	2	0	0	1.50

loanDepot has a consensus price target of $1.38, indicating a potential upside of 120.00%. Given loanDepot’s stronger consensus rating and higher probable upside, analysts clearly believe loanDepot is more favorable than Kingsway Financial Services.

Summary

loanDepot beats Kingsway Financial Services on 9 of the 12 factors compared between the two stocks.

About Kingsway Financial Services

Kingsway Financial Services Inc., through its subsidiaries, engages in the extended warranty business services, asset management, and real estate businesses. The company operates through three segments: Extended Warranty, Leased Real Estate, and Kingsway Search Xcelerator. The Extended Warranty segment markets, sells, and administers vehicle service agreements and related products for new and used automobiles, motorcycles, and ATVs. This segment also sells new home warranty products, as well as offers uninsured warrant administration services to homebuilders and homeowners; markets and distributes warranty products to manufacturers, distributors, and installers of heating, ventilation and air conditioning, standby generator, commercial LED lighting, and commercial refrigeration equipment; and provides equipment breakdown and maintenance support services to companies. The Leased Real Estate segment owns a parcel of real property consisting of approximately 192 acres located in the State of Texas. The Kingsway Search Xcelerator offers outsourced finance and human resources consulting services, including operational accounting, such as bookkeeping, accounting, financial reporting, and analysis and strategic finance services; technical accounting comprising initial public offerings, SEC reporting, and international consolidation services; human resources, workforce management, and compliance support services; and advisory services. The company offers its products and services through credit unions, dealers, homebuilders, and consumers. Kingsway Financial Services Inc. was incorporated in 1989 and is based in Itasca, Illinois.

About loanDepot

loanDepot, Inc. engages in originating, financing, selling, and servicing residential mortgage loans in the United States. The company offers conventional agency-conforming and prime jumbo, federal assistance residential mortgage, and home equity loans. It also provides settlement services, which include captive title and escrow business; real estate services that cover captive real estate referral business; and insurance services, including services to homeowners, as well as other consumer insurance policies. The company was founded in 2010 and is headquartered in Irvine, California.