Regional Management Corp (NYSE: RM) and PHH Corp (NYSE:PHH) are both small-cap financials companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations for Regional Management Corp and PHH Corp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Regional Management Corp 0 5 1 0 2.17
PHH Corp 0 1 1 0 2.50

Regional Management Corp presently has a consensus target price of $25.83, indicating a potential upside of 14.31%. PHH Corp has a consensus target price of $16.25, indicating a potential upside of 14.04%. Given Regional Management Corp’s higher probable upside, equities research analysts clearly believe Regional Management Corp is more favorable than PHH Corp.

Earnings & Valuation

This table compares Regional Management Corp and PHH Corp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Regional Management Corp $246.92 million 1.07 $68.46 million $2.28 9.91
PHH Corp $734.00 million 1.00 -$261.67 million ($5.10) -2.79

Regional Management Corp has higher revenue, but lower earnings than PHH Corp. PHH Corp is trading at a lower price-to-earnings ratio than Regional Management Corp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Regional Management Corp and PHH Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Regional Management Corp 9.39% 11.30% 3.47%
PHH Corp -55.15% -20.67% -7.37%

Institutional and Insider Ownership

86.8% of Regional Management Corp shares are owned by institutional investors. Comparatively, 98.1% of PHH Corp shares are owned by institutional investors. 9.5% of Regional Management Corp shares are owned by company insiders. Comparatively, 2.5% of PHH Corp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Regional Management Corp has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, PHH Corp has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500.

Summary

Regional Management Corp beats PHH Corp on 8 of the 12 factors compared between the two stocks.

About Regional Management Corp

Regional Management Corp. is a diversified consumer finance company. The Company provides an array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies and other traditional lenders. Its products include small loans, large loans, automobile loans, retail loans, and optional payment and collateral protection insurance products. It offers small loans ranging from $500 to $2,500, through its branches. It offers large installment loans with cash proceeds to the customer ranging from $2,501 to $20,000. As of December 31, 2016, automobile loans were offered in amounts up to $27,500. As of December 31, 2016, retail loans were indirect installment loans structured as retail installment sales contracts that were offered in amounts of up to $7,500. Optional Payment and Collateral Protection Insurance Products offer customers a number of optional payment and collateral protection insurance products.

About PHH Corp

PHH Corporation is a standalone mortgage company. The Company provides outsourced mortgage banking services to a range of clients, including financial institutions and real estate brokers throughout the United States, and is focused on originating, selling, servicing and subservicing residential mortgage loans through its subsidiary, PHH Mortgage Corporation and its subsidiaries. It operates through two segments: Mortgage Production and Mortgage Servicing. The Mortgage Production segment provides mortgage loan origination services and sells mortgage loans. The Mortgage Servicing segment performs servicing activities for loans originated by the Company and mortgage servicing rights purchased from others, and acts as a subservicer for certain clients that own the underlying mortgage servicing rights. The Mortgage Production segment provides private label mortgage services to financial institutions and real estate brokers, and sources mortgage loans through its retail platform.

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