FirstCash (NASDAQ: FCFS) and LendingClub Corporation (NYSE:LC) are both financials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Volatility and Risk

FirstCash has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, LendingClub Corporation has a beta of 1.78, indicating that its stock price is 78% more volatile than the S&P 500.

Insider and Institutional Ownership

89.1% of LendingClub Corporation shares are owned by institutional investors. 11.4% of LendingClub Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for FirstCash and LendingClub Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FirstCash 0 2 5 0 2.71
LendingClub Corporation 0 9 8 0 2.47

FirstCash currently has a consensus price target of $64.00, suggesting a potential downside of 0.78%. Given LendingClub Corporation’s higher probable upside, analysts clearly believe LendingClub Corporation is more favorable than FirstCash.

Profitability

This table compares FirstCash and LendingClub Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FirstCash 3.66% 4.10% 2.95%
LendingClub Corporation -24.52% -11.97% -2.18%

Earnings & Valuation

This table compares FirstCash and LendingClub Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
FirstCash N/A N/A N/A $1.97 32.74
LendingClub Corporation $495.47 million 4.57 -$145.96 million ($0.30) -18.70

FirstCash has higher revenue, but lower earnings than LendingClub Corporation. LendingClub Corporation is trading at a lower price-to-earnings ratio than FirstCash, indicating that it is currently the more affordable of the two stocks.

Summary

LendingClub Corporation beats FirstCash on 6 of the 11 factors compared between the two stocks.

About FirstCash

FirstCash, Inc., formerly First Cash Financial Services, Inc., is an operator of retail-based pawn stores in the United States and Latin America. The Company’s primary business is the operation of full-service pawn stores, which make small pawn loans secured by personal property, such as consumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. The Company’s operates through two segments: the U.S. operations segment and the Latin America operations segment. The U.S. operations segment consists of all pawn and consumer loan operations in the United States and the Latin America operations segment consists of all pawn and consumer loan operations in Latin America, which includes operations in Mexico, Guatemala and El Salvador. In addition, some of the Company’s pawn stores offer small unsecured consumer loans or credit services products. The Company also operates consumer finance stores in Texas and Mexico.

About LendingClub Corporation

LendingClub Corporation provides online marketplace to connect borrowers and investors. Consumers and small business owners borrow through Lending Club. Investors use Lending Club to earn risk-adjusted returns from an asset class that has been closed to many investors and only available on a limited basis to large institutional investors. Its technology automates aspects of operations, including the borrower application process, data gathering, credit decisioning and scoring, loan funding, investing and servicing, regulatory compliance and fraud detection. Its platform offers analytical tools and data to enable investors to make decisions and assess their portfolios. Its technology platform has allowed it to expand its offerings from personal loans to include small business loans, and to expand investor classes from individuals to institutions and create various investment vehicles.

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