Critical Contrast: X Financial (NYSE:XYF) vs. PROG (NYSE:PRG)

PROG (NYSE:PRG) and X Financial (NYSE:XYF) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Valuation & Earnings

This table compares PROG and X Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PROG	$2.41 billion	0.66	$146.79 million	$3.62	10.99
X Financial	$1.09 billion	0.19	$209.43 million	$1.96	2.74

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

Dividends

PROG pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. X Financial pays an annual dividend of $0.54 per share and has a dividend yield of 10.0%. PROG pays out 15.5% of its earnings in the form of a dividend. X Financial pays out 27.6% 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. PROG has increased its dividend for 2 consecutive years.

Profitability

This table compares PROG and X Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PROG	5.57%	21.88%	9.15%
X Financial	9.94%	9.14%	5.20%

Institutional and Insider Ownership

97.9% of PROG shares are held by institutional investors. Comparatively, 1.1% of X Financial shares are held by institutional investors. 3.7% of PROG shares are held by insiders. Comparatively, 31.6% of X Financial shares are held 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.

Risk & Volatility

PROG has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500. Comparatively, X Financial has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for PROG and X Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PROG	0	3	6	1	2.80
X Financial	0	1	0	0	2.00

PROG currently has a consensus target price of $49.44, indicating a potential upside of 24.32%. Given PROG’s stronger consensus rating and higher probable upside, equities research analysts clearly believe PROG is more favorable than X Financial.

Summary

PROG beats X Financial on 14 of the 18 factors compared between the two stocks.

About PROG

PROG Holdings, Inc. (NYSE:PRG) is a financial technology holding company based in Salt Lake City, Utah with three business segments: Progressive Leasing, which offers lease-to-own transactions primarily to credit-challenged consumers through e-commerce and point-of-sale retail partners, via online, mobile, and in-store solutions; Vive Financial, which provides consumers who may not qualify for traditional prime lending with a variety of second-look, revolving credit products through private label and branded credit cards; and Four Technologies, which provides consumers of all credit backgrounds Buy Now, Pay Later (BNPL) options through four interest-free installments via its platform, Four.

About X Financial

X Financial provides personal finance services in the People’s Republic of China. The company offers services as an online marketplace connecting borrowers and investors or institutional funding partners. Its loan products include Xiaoying credit loan, which consists of Xiaoying card loan; and Xiaoying preferred loan to small business owners. The company also offers Xiaoying housing loan, a home equity loan product for property owners; investment products through Xiaoying wealth management platform, such as funds, money market, and insurance products; and loan facilitation services to other platforms. In addition, it engages in the technology development, service, and sale of products; and provision of guarantee and consulting services. The company was incorporated in 2014 and is headquartered in Shenzhen, the People’s Republic of China.