Capital One Financial (NYSE:COF – Get Free Report) and Yirendai (NYSE:YRD – Get Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.
Risk and Volatility
Capital One Financial has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Yirendai has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.
Profitability
This table compares Capital One Financial and Yirendai’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Capital One Financial | 13.37% | 11.28% | 1.90% |
| Yirendai | -14.35% | -7.58% | -5.21% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Capital One Financial | 0 | 3 | 21 | 0 | 2.88 |
| Yirendai | 1 | 0 | 0 | 0 | 1.00 |
Capital One Financial currently has a consensus target price of $259.36, suggesting a potential upside of 17.60%. Given Capital One Financial’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Capital One Financial is more favorable than Yirendai.
Valuation and Earnings
This table compares Capital One Financial and Yirendai”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Capital One Financial | $69.25 billion | 1.95 | $2.45 billion | $16.16 | 13.65 |
| Yirendai | $817.84 million | 0.13 | $7.80 million | ($1.18) | -1.00 |
Capital One Financial has higher revenue and earnings than Yirendai. Yirendai is trading at a lower price-to-earnings ratio than Capital One Financial, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
89.8% of Capital One Financial shares are owned by institutional investors. Comparatively, 2.0% of Yirendai shares are owned by institutional investors. 0.8% of Capital One Financial shares are owned by company insiders. Comparatively, 42.2% of Yirendai shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Dividends
Capital One Financial pays an annual dividend of $3.20 per share and has a dividend yield of 1.5%. Yirendai pays an annual dividend of $0.20 per share and has a dividend yield of 17.0%. Capital One Financial pays out 19.8% of its earnings in the form of a dividend. Yirendai pays out -16.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Yirendai is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Capital One Financial beats Yirendai on 11 of the 15 factors compared between the two stocks.
About Capital One Financial
Capital One Financial Corporation operates as the financial services holding company for the Capital One, National Association, which engages in the provision of various financial products and services in the United States, Canada, and the United Kingdom. It operates through three segments: Credit Card, Consumer Banking, and Commercial Banking. The company accepts checking accounts, money market deposits, negotiable order of withdrawals, savings deposits, and time deposits. Its loan products include credit card loans; auto and retail banking loans; and commercial and multifamily real estate, and commercial and industrial loans. The company also offers credit and debit card products; online direct banking services; and provides advisory, capital markets, treasury management, and depository services. It serves consumers, small businesses, and commercial clients through digital channels, branches, cafés, and other distribution channels located in New York, Louisiana, Texas, Maryland, Virginia, New Jersey, and California. The company was founded in 1988 and is headquartered in McLean, Virginia.
About Yirendai
Yiren Digital Ltd. provides financial services through an AI-powered platform in China. Its platform provides a suite of financial and lifestyle services. The company offers financial services, which provides a portfolio of loan products to borrowers; insurance brokerage services; and consumption and lifestyle services, including non-financial products and services to meet various consumer needs. It supports clients at various growth stages, addressing financing needs arising from consumption and production activities, and augmenting the well-being and security of individuals, families, and businesses. The company was formerly known as Yirendai Ltd. and changed its name to Yiren Digital Ltd. in September 2019. Yiren Digital Ltd. was founded in 2012 and is based in Beijing, the People's Republic of China. Yiren Digital Ltd. operates as a subsidiary of CreditEase Holdings (Cayman) Limited.
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