Head to Head Contrast: LendingTree (NASDAQ:TREE) & loanDepot (NYSE:LDI)

loanDepot (NYSE:LDI) and LendingTree (NASDAQ:TREE) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Earnings & Valuation

This table compares loanDepot and LendingTree”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
loanDepot	$1.06 billion	0.40	-$98.33 million	($0.45)	-2.88
LendingTree	$900.22 million	0.55	-$41.70 million	($4.13)	-8.78

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

Risk and Volatility

loanDepot has a beta of 3.39, meaning that its stock price is 239% more volatile than the S&P 500. Comparatively, LendingTree has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500.

Profitability

This table compares loanDepot and LendingTree’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
loanDepot	-7.74%	-18.41%	-1.57%
LendingTree	-5.67%	14.76%	2.13%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for loanDepot and LendingTree, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
loanDepot	1	1	0	0	1.50
LendingTree	0	1	7	1	3.00

loanDepot presently has a consensus price target of $1.98, indicating a potential upside of 52.51%. LendingTree has a consensus price target of $64.13, indicating a potential upside of 76.75%. Given LendingTree’s stronger consensus rating and higher possible upside, analysts clearly believe LendingTree is more favorable than loanDepot.

Institutional and Insider Ownership

39.4% of loanDepot shares are held by institutional investors. Comparatively, 68.3% of LendingTree shares are held by institutional investors. 78.1% of loanDepot shares are held by company insiders. Comparatively, 23.1% of LendingTree shares are held by company 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.

Summary

LendingTree beats loanDepot on 10 of the 15 factors compared between the two stocks.

About loanDepot

loanDepot, Inc. engages in originating, financing, selling, and servicing residential mortgage loans in the United States. The company offers conventional agency-conforming and prime jumbo, federal assistance residential mortgage, and home equity loans. It also provides settlement services, which include captive title and escrow business; real estate services that cover captive real estate referral business; and insurance services, including services to homeowners, as well as other consumer insurance policies. The company was founded in 2010 and is headquartered in Irvine, California.

About LendingTree

LendingTree, Inc., through its subsidiary, operates online consumer platform in the United States. It operates through three segments: Home, Consumer, and Insurance. The Home segment offers purchase mortgage, refinance mortgage, and home equity loans and lines of credit; and real estate brokerage services. The Consumer segment provides credit cards; personal, small business, student, and auto loans; deposit accounts; and other credit products, such as debt settlement services. The Insurance segment includes information, tools, and access to insurance quote products, including home, automobile, and health and Medicare through which consumers are matched with insurance lead aggregators to obtain insurance offers and policies. In addition, the company offers QuoteWizard, a marketplace for insurance comparison; ValuePenguin, a personal finance website that offers consumers objective analysis on various financial topics from insurance to credit cards; and Stash, a consumer investing and banking platform that offers a suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back rewards program. The company was formerly known as Tree.com, Inc. and changed its name to LendingTree, Inc. in January 2015. LendingTree, Inc. was incorporated in 1996 and is based in Charlotte, North Carolina.