Nationstar Mortgage Holdings (NYSE: NSM) and Leju Holdings Limited (NYSE:LEJU) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Valuation & Earnings

This table compares Nationstar Mortgage Holdings and Leju Holdings Limited’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nationstar Mortgage Holdings $1.42 billion 1.31 $223.85 million $2.29 8.28
Leju Holdings Limited $449.20 million 0.46 -$91.60 million ($0.91) -1.68

Nationstar Mortgage Holdings has higher revenue and earnings than Leju Holdings Limited. Leju Holdings Limited is trading at a lower price-to-earnings ratio than Nationstar Mortgage Holdings, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

99.0% of Nationstar Mortgage Holdings shares are held by institutional investors. Comparatively, 4.4% of Leju Holdings Limited shares are held by institutional investors. 0.8% of Nationstar Mortgage Holdings shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Nationstar Mortgage Holdings and Leju Holdings Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nationstar Mortgage Holdings 2 3 5 0 2.30
Leju Holdings Limited 1 0 0 0 1.00

Nationstar Mortgage Holdings currently has a consensus target price of $18.33, indicating a potential downside of 3.36%. Leju Holdings Limited has a consensus target price of $2.10, indicating a potential upside of 37.25%. Given Leju Holdings Limited’s higher probable upside, analysts plainly believe Leju Holdings Limited is more favorable than Nationstar Mortgage Holdings.

Risk and Volatility

Nationstar Mortgage Holdings has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Leju Holdings Limited has a beta of 2.95, indicating that its share price is 195% more volatile than the S&P 500.

Profitability

This table compares Nationstar Mortgage Holdings and Leju Holdings Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nationstar Mortgage Holdings 10.52% 9.64% 0.87%
Leju Holdings Limited -27.57% -31.88% -22.18%

Summary

Nationstar Mortgage Holdings beats Leju Holdings Limited on 11 of the 13 factors compared between the two stocks.

Nationstar Mortgage Holdings Company Profile

Nationstar Mortgage Holdings Inc. provides servicing, origination and transaction based services principally to single-family residences throughout the United States. The Company operates through three segments: Servicing, Originations and Xome. The Company provides residential loan services in the United States. The Company also operates an integrated residential loan origination platform that is primarily focused on customer retention. Its Xome subsidiary offers an array of complementary services related to the purchase and disposition of residential real estate. It provides non-bank services and residential mortgage services in the United States conducting operations through its Nationstar Mortgage and Champion Mortgage brands. It originates and purchases conventional mortgage loans conforming to the underwriting standards of the government sponsored entities, which it collectively refers to as Agency loans. The Xome segment is a provider of technology and data-enhanced solutions.

Leju Holdings Limited Company Profile

Leju Holdings Limited is an online to offline (O2O), real estate services provider in China. The Company offers real estate e-commerce, online advertising and online listing services through its online platform, which consists of local Websites covering over 260 cities and various mobile applications. The Company integrates its online platform with offline services to facilitate residential property transactions. In addition to its own Websites, the Company operates various real estate and home furnishing Websites of SINA Corporation (SINA). Its O2O services for new residential properties include selling discount coupons and facilitating online property viewing, physical property visits, marketing events and pre-sale customer support. It sells advertising primarily on the SINA new residential properties and home furnishing Websites, which are operated by the Company.

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