Yirendai (NYSE: YRD) and Leaf Group (NYSE:DMD) are both computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Yirendai and Leaf Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yirendai 1 0 1 0 2.00
Leaf Group 0 1 1 0 2.50

Yirendai currently has a consensus target price of $29.00, indicating a potential downside of 40.57%. Leaf Group has a consensus target price of $7.75, indicating a potential upside of 22.05%. Given Leaf Group’s stronger consensus rating and higher probable upside, analysts plainly believe Leaf Group is more favorable than Yirendai.

Earnings and Valuation

This table compares Yirendai and Leaf Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Yirendai $635.79 million 4.59 $213.72 million $3.26 14.97
Leaf Group N/A N/A N/A ($0.24) -26.46

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

Volatility and Risk

Yirendai has a beta of 8.51, suggesting that its stock price is 751% more volatile than the S&P 500. Comparatively, Leaf Group has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Profitability

This table compares Yirendai and Leaf Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yirendai 32.37% 80.79% 36.20%
Leaf Group -31.38% -52.73% -41.29%

Institutional & Insider Ownership

6.9% of Yirendai shares are owned by institutional investors. Comparatively, 58.8% of Leaf Group shares are owned by institutional investors. 44.0% of Leaf Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Yirendai pays an annual dividend of $1.48 per share and has a dividend yield of 3.0%. Leaf Group does not pay a dividend. Yirendai pays out 45.4% of its earnings in the form of a dividend.

Summary

Yirendai beats Leaf Group on 7 of the 12 factors compared between the two stocks.

About Yirendai

Yirendai Ltd. is engaged in online consumer finance marketplace business in China. The Company conducts its business in China, through Yi Ren Heng Ye Technology Development (Beijing) Co., Ltd. (Heng Ye) and its consolidated variable interest entity, Heng Cheng Technology Development (Beijing) Co., Ltd. (Heng Cheng). Heng Cheng operates its Website, www.yirendai.com, and has an Internet content provider (ICP) license as an Internet information provider. Its online marketplace facilitates standard loan products, express loan products and vertical loan products to borrowers. Uses for these loan products include home remodels, durable good purchases, travel and continuing education. Its online marketplace provides investors with various investing tools, such as automated investing tool and self-directed investing tool. It maintains a secondary loan market on its marketplace where investors can transfer the loans they hold prior to maturity at the fair value of the remaining loans.

About Leaf Group

Leaf Group Ltd., formerly Demand Media, Inc., is diversified Internet marketplaces and media company. The Company has online media properties and marketplace platforms that enable communities of creators to reach audiences in lifestyle categories. The Company operates an online studio platform for the professional creation and distribution of content, as well as two online artist marketplaces. Its business comprises two service offerings: Content & Media and Marketplaces. The Company creates media content, including text articles, videos, photographs and designed visual formats, and publishes such content to its owned and operated online properties and to its customers’ online properties. The Company also offers its content creation and distribution platform to provide custom content and other content marketing solutions to brands, publishers and advertisers.

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