Financial Contrast: LendingClub (NYSE:LC) vs. PPDAI Group (NYSE:FINV)

LendingClub (NYSE:LC) and PPDAI Group (NYSE:FINV) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LendingClub	16.99%	11.92%	1.55%
PPDAI Group	14.49%	12.31%	7.95%

Risk & Volatility

LendingClub has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500. Comparatively, PPDAI Group has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.

Valuation and Earnings

This table compares LendingClub and PPDAI Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LendingClub	$1.03 billion	2.14	$135.68 million	$1.49	12.89
PPDAI Group	$1.94 billion	0.38	$363.56 million	$1.06	2.86

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

Analyst Recommendations

This is a summary of recent recommendations for LendingClub and PPDAI Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LendingClub	0	2	6	1	2.89
PPDAI Group	0	2	0	0	2.00

LendingClub presently has a consensus price target of $23.07, indicating a potential upside of 20.10%. PPDAI Group has a consensus price target of $4.10, indicating a potential upside of 35.09%. Given PPDAI Group’s higher possible upside, analysts clearly believe PPDAI Group is more favorable than LendingClub.

Insider and Institutional Ownership

74.1% of LendingClub shares are owned by institutional investors. Comparatively, 31.1% of PPDAI Group shares are owned by institutional investors. 3.2% of LendingClub shares are owned by company insiders. Comparatively, 44.0% of PPDAI Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

LendingClub beats PPDAI Group on 9 of the 15 factors compared between the two stocks.

About LendingClub

LendingClub Corporation, operates as a bank holding company, that provides range of financial products and services in the United States. It offers deposit products, including savings accounts, checking accounts, and certificates of deposit. The company also provides loan products, such as consumer loans comprising unsecured personal loans, secured auto refinance loans, and patient and education finance loans; and commercial loans, including small business loans. In addition, it operates an online lending marketplace platform. The company was incorporated in 2006 and is headquartered in San Francisco, California.

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.