Critical Contrast: Walker & Dunlop (NYSE:WD) & Upstart (NASDAQ:UPST)

Walker & Dunlop (NYSE:WD) and Upstart (NASDAQ:UPST) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.

Institutional & Insider Ownership

81.0% of Walker & Dunlop shares are owned by institutional investors. Comparatively, 63.0% of Upstart shares are owned by institutional investors. 5.3% of Walker & Dunlop shares are owned by insiders. Comparatively, 18.1% of Upstart shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Walker & Dunlop and Upstart”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Walker & Dunlop	$1.13 billion	2.53	$108.17 million	$3.19	26.60
Upstart	$628.83 million	9.94	-$128.58 million	($1.46)	-45.71

Walker & Dunlop has higher revenue and earnings than Upstart. Upstart is trading at a lower price-to-earnings ratio than Walker & Dunlop, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Walker & Dunlop and Upstart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Walker & Dunlop	9.55%	9.64%	3.96%
Upstart	-20.20%	-25.87%	-7.95%

Volatility & Risk

Walker & Dunlop has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, Upstart has a beta of 2.25, meaning that its share price is 125% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Walker & Dunlop and Upstart, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Walker & Dunlop	0	2	0	1	2.67
Upstart	2	7	5	0	2.21

Walker & Dunlop presently has a consensus target price of $107.50, indicating a potential upside of 26.67%. Upstart has a consensus target price of $73.38, indicating a potential upside of 9.97%. Given Walker & Dunlop’s stronger consensus rating and higher probable upside, analysts plainly believe Walker & Dunlop is more favorable than Upstart.

Summary

Walker & Dunlop beats Upstart on 11 of the 15 factors compared between the two stocks.

About Walker & Dunlop

Walker & Dunlop, Inc. is a holding company, which engages in the provision of commercial real estate and finance services. It operates through the following segments: Capital Markets, Servicing and Asset Management, and Corporate. The Capital Markets segment offers a comprehensive range of commercial real estate finance products to customers. The Servicing and Asset Management segment includes servicing and asset-managing and managing third-party capital investments. The Corporate segment consists primarily of the company’s treasury operations and other corporate-level activities. The company was founded by Oliver Walker and Laird Dunlop in 1937 and is headquartered in Bethesda, MD.

About Upstart

Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small dollar loans that connects consumer demand for loans to its to bank and credit unions. Upstart Holdings, Inc. was founded in 2012 and is headquartered in San Mateo, California.