LendingClub (NYSE:LC – Get Free Report) and PPDAI Group (NYSE:FINV – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, valuation, analyst recommendations, institutional ownership and risk.
Institutional and Insider Ownership
74.1% of LendingClub shares are held by institutional investors. Comparatively, 31.1% of PPDAI Group shares are held by institutional investors. 3.2% of LendingClub shares are held by insiders. Comparatively, 44.0% of PPDAI Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
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% |
Analyst Ratings
This is a breakdown of current ratings and target prices for LendingClub and PPDAI Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LendingClub | 0 | 2 | 6 | 1 | 2.89 |
| PPDAI Group | 1 | 1 | 0 | 0 | 1.50 |
LendingClub presently has a consensus price target of $23.07, suggesting a potential upside of 20.10%. PPDAI Group has a consensus price target of $4.10, suggesting a potential upside of 44.62%. Given PPDAI Group’s higher possible upside, analysts clearly believe PPDAI Group is more favorable than LendingClub.
Risk and Volatility
LendingClub has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500. Comparatively, PPDAI Group has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500.
Earnings and Valuation
This table compares LendingClub and PPDAI Group”s top-line revenue, earnings per share (EPS) 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 | 0.36 | $363.56 million | $1.06 | 2.67 |
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.
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.
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