HealthStream (NASDAQ:HSTM) and Yirendai (NYSE:YRD) Critical Analysis

HealthStream (NASDAQ:HSTM) and Yirendai (NYSE:YRD) are both small-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, profitability, valuation, dividends and risk.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for HealthStream and Yirendai, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthStream	1	2	0	0	1.67
Yirendai	0	1	0	0	2.00

HealthStream currently has a consensus target price of $25.00, indicating a potential upside of 22.25%. Given HealthStream’s higher probable upside, equities research analysts plainly believe HealthStream is more favorable than Yirendai.

Profitability

This table compares HealthStream and Yirendai’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HealthStream	6.03%	5.98%	4.14%
Yirendai	0.31%	0.18%	0.13%

Dividends

HealthStream pays an annual dividend of $0.14 per share and has a dividend yield of 0.7%. Yirendai pays an annual dividend of $0.40 per share and has a dividend yield of 24.5%. HealthStream pays out 23.0% of its earnings in the form of a dividend. Yirendai pays out 1,333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HealthStream has raised its dividend for 2 consecutive years.

Volatility & Risk

HealthStream has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, Yirendai has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Insider & Institutional Ownership

69.6% of HealthStream shares are owned by institutional investors. Comparatively, 2.0% of Yirendai shares are owned by institutional investors. 20.5% of HealthStream shares are owned by insiders. Comparatively, 42.2% of Yirendai shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares HealthStream and Yirendai”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthStream	$304.06 million	2.00	$18.34 million	$0.61	33.52
Yirendai	$817.84 million	0.17	$5.80 million	$0.03	54.50

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

Summary

HealthStream beats Yirendai on 10 of the 16 factors compared between the two stocks.

About HealthStream

HealthStream, Inc. provides Software-as-a-Service (SaaS) based applications for healthcare organizations in the United States. The company’s solutions help healthcare organizations in meeting their ongoing clinical development, talent management, training, education, assessment, competency management, safety and compliance, and scheduling, as well as provider credentialing, privileging, and enrollment needs. It offers hStream, a technology platform that powers a range of healthcare workforce solutions. The company provides its solutions to customers across a range of entities within the healthcare industry, including private, not-for-profit, and government entities, as well as pharmaceutical and medical device companies through its direct sales teams. The company was incorporated in 1990 and is headquartered in Nashville, Tennessee.

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.