PPDAI Group (NYSE:FINV – Get Free Report) and SLM (NASDAQ:SLM – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.
Profitability
This table compares PPDAI Group and SLM’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PPDAI Group | 14.49% | 12.31% | 7.95% |
| SLM | 26.09% | 33.81% | 2.51% |
Earnings & Valuation
This table compares PPDAI Group and SLM”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PPDAI Group | $1.94 billion | 0.42 | $363.56 million | $1.06 | 3.18 |
| SLM | $2.63 billion | 1.84 | $744.85 million | $3.58 | 7.20 |
SLM has higher revenue and earnings than PPDAI Group. PPDAI Group is trading at a lower price-to-earnings ratio than SLM, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
31.1% of PPDAI Group shares are owned by institutional investors. Comparatively, 98.9% of SLM shares are owned by institutional investors. 44.0% of PPDAI Group shares are owned by company insiders. Comparatively, 1.4% of SLM 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.
Volatility and Risk
PPDAI Group has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, SLM has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for PPDAI Group and SLM, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PPDAI Group | 1 | 1 | 0 | 0 | 1.50 |
| SLM | 1 | 6 | 5 | 0 | 2.33 |
PPDAI Group presently has a consensus price target of $4.10, suggesting a potential upside of 21.77%. SLM has a consensus price target of $29.80, suggesting a potential upside of 15.60%. Given PPDAI Group’s higher probable upside, research analysts clearly believe PPDAI Group is more favorable than SLM.
Summary
SLM beats PPDAI Group on 11 of the 14 factors compared between the two stocks.
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.
About SLM
SLM Corporation, through its subsidiaries, originates and services private education loans to students and their families to finance the cost of their education in the United States. It is also involved in the provision of retail deposit accounts, including certificates of deposit, money market accounts, and high-yield savings accounts; and interest-bearing omnibus accounts. The company was formerly known as New BLC Corporation and changed its name to SLM Corporation in December 2013. SLM Corporation was founded in 1972 and is headquartered in Newark, Delaware.
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