loanDepot (NYSE:LDI) and MGIC Investment (NYSE:MTG) Head to Head Analysis

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

Risk and Volatility

MGIC Investment has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, loanDepot has a beta of 3.4, suggesting that its share price is 240% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for MGIC Investment and loanDepot, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MGIC Investment	0	4	1	2	2.71
loanDepot	3	2	0	0	1.40

MGIC Investment presently has a consensus price target of $30.60, indicating a potential upside of 2.28%. loanDepot has a consensus price target of $1.92, indicating a potential upside of 161.48%. Given loanDepot’s higher possible upside, analysts clearly believe loanDepot is more favorable than MGIC Investment.

Insider & Institutional Ownership

95.6% of MGIC Investment shares are held by institutional investors. Comparatively, 39.4% of loanDepot shares are held by institutional investors. 1.3% of MGIC Investment shares are held by insiders. Comparatively, 65.9% of loanDepot shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
MGIC Investment	59.20%	13.90%	10.81%
loanDepot	-5.52%	-28.25%	-1.56%

Valuation and Earnings

This table compares MGIC Investment and loanDepot”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MGIC Investment	$1.21 billion	5.06	$738.35 million	$3.20	9.35
loanDepot	$1.19 billion	0.21	-$62.65 million	($0.30)	-2.44

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

Summary

MGIC Investment beats loanDepot on 12 of the 15 factors compared between the two stocks.

About MGIC Investment

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services to lenders and government sponsored entities in the United States, the District of Columbia, Puerto Rico, and Guam. The company offers primary mortgage insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure. It also provides pool insurance for secondary market mortgage transactions; and contract underwriting services, as well as reinsurance. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. MGIC Investment Corporation was founded in 1957 and is headquartered in Milwaukee, Wisconsin.

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.