PHH (NYSE: PHH) and Orix (NYSE:IX) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, valuation, dividends, profitability and analyst recommendations.

Dividends

Orix pays an annual dividend of $1.07 per share and has a dividend yield of 1.2%. PHH does not pay a dividend. Orix pays out 110.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares PHH and Orix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PHH -47.59% -26.45% -8.51%
Orix 10.61% 11.36% 2.71%

Institutional and Insider Ownership

98.6% of PHH shares are owned by institutional investors. Comparatively, 1.9% of Orix shares are owned by institutional investors. 2.5% of PHH shares are owned by company insiders. Comparatively, 0.1% of Orix shares are owned 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.

Valuation & Earnings

This table compares PHH and Orix’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PHH $456.00 million 0.76 -$217.00 million ($4.47) -2.40
Orix $24.78 billion 0.90 $2.54 billion $0.97 90.16

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for PHH and Orix, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PHH 0 2 0 0 2.00
Orix 0 0 0 0 N/A

PHH presently has a consensus target price of $13.25, indicating a potential upside of 23.72%. Given PHH’s higher possible upside, analysts plainly believe PHH is more favorable than Orix.

Risk and Volatility

PHH has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, Orix has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.

Summary

Orix beats PHH on 9 of the 13 factors compared between the two stocks.

PHH Company Profile

PHH Corporation, through its PHH Mortgage Corporation, operates as a sub servicer of residential mortgages in the United States. The company operates through two segments, Mortgage Production and Mortgage Servicing. It provides servicing and portfolio retention solutions to investors of mortgage servicing rights, financial and wealth management institutions, regional and community banks, and credit unions. The company was founded in 1946 and is headquartered in Mount Laurel, New Jersey.

Orix Company Profile

ORIX Corporation provides financial services. It operates through six segments: Corporate Financial Services, Maintenance Leasing, Real Estate, Investment and Operation, Retail, and Overseas Business. The Corporate Financial Services segment engages in lending, leasing, and fee businesses. The Maintenance Leasing segment is involved in leasing, automobile rental, and car sharing activities; lease and rental of precision measuring, information technology related, and medical equipment; and the sale of software packages, as well as the provision of technical support, equipment calibration, and asset management services. The Real Estate segment engages in the development and leasing of office buildings, commercial properties, logistics centers, and residences; and operation of hotels, Japanese inns, aquariums, golf courses, training facilities, senior housings, baseball stadiums, and theaters. This segment also offers REIT asset management and real estate investment advisory services. The Investment and Operation segment is involved in the collection and disposal of waste from end-of-lease assets; solar, wind, and geothermal power generation; investment in private equities and non-performing loans; and operation of the Kansai and Osaka International Airport as a concession. The Retail segment engages in life insurance, banking, and card loan businesses. The Overseas Business segment is involved in leasing, lending, investment in bonds, investment banking, asset management, and ship-and aircraft-related operations. The company was formerly known as Orient Leasing Co., Ltd. and changed its name to ORIX Corporation in 1989. ORIX Corporation was founded in 1964 and is headquartered in Tokyo, Japan.

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