Financial Contrast: LM Funding America (NASDAQ:LMFA) vs. Yirendai (NASDAQ:YRD)

LM Funding America (NASDAQ:LMFA) and Yirendai (NYSE:YRD) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.

Risk & Volatility

LM Funding America has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500. Comparatively, Yirendai has a beta of 2.54, meaning that its share price is 154% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for LM Funding America and Yirendai, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LM Funding America 0 0 0 0 N/A
Yirendai 2 1 0 0 1.33

Yirendai has a consensus target price of $6.34, indicating a potential upside of 32.64%. Given Yirendai’s higher probable upside, analysts clearly believe Yirendai is more favorable than LM Funding America.

Profitability

This table compares LM Funding America and Yirendai’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LM Funding America -48.36% -29.27% -17.21%
Yirendai 14.45% 39.87% 13.27%

Earnings and Valuation

This table compares LM Funding America and Yirendai’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LM Funding America $3.39 million 0.75 -$470,000.00 N/A N/A
Yirendai $817.50 million 0.36 $140.59 million $4.48 1.07

Yirendai has higher revenue and earnings than LM Funding America.

Institutional and Insider Ownership

1.6% of LM Funding America shares are held by institutional investors. Comparatively, 8.7% of Yirendai shares are held by institutional investors. 28.0% of LM Funding America shares are held by company insiders. Comparatively, 42.2% of Yirendai shares are held 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.

Summary

Yirendai beats LM Funding America on 9 of the 10 factors compared between the two stocks.

About LM Funding America

LM Funding America, Inc., through its subsidiary, LM Funding, LLC, operates as a specialty finance company. It provides funding to nonprofit community associations (Associations) primarily located in the state of Florida, as well as in the states of Washington, Colorado, and Illinois. The company offers funding to Associations by purchasing their rights under delinquent accounts that are selected by the Associations arising from unpaid Association assessments. It is also involved in the business of purchasing delinquent accounts on various terms tailored to suit each Association's financial needs, including under its New Neighbor Guaranty program. The company was founded in 2008 and is based in Tampa, Florida.

About Yirendai

Yirendai Ltd. operates as an online consumer finance marketplace that connects borrowers and investors primarily in the People's Republic of China. It offers standard loan products; and fasttrack loan products through mobile applications. The company also provides investing tools. The company was founded in 2012 and is based in Beijing, the People's Republic of China. Yirendai Ltd. is a subsidiary of Creditease Holdings (Cayman) Limited.

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