Head-To-Head Comparison: Nelnet (NYSE:NNI) versus Qfin (NASDAQ:QFIN)

Nelnet (NYSE:NNI) and Qfin (NASDAQ:QFIN) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Insider and Institutional Ownership

33.5% of Nelnet shares are owned by institutional investors. Comparatively, 74.8% of Qfin shares are owned by institutional investors. 40.3% of Nelnet shares are owned by company insiders. Comparatively, 17.1% of Qfin shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Nelnet and Qfin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nelnet	12.93%	7.15%	1.82%
Qfin	22.23%	15.23%	6.60%

Volatility and Risk

Nelnet has a beta of 0.78, suggesting that its share price is 22% less volatile than the S&P 500. Comparatively, Qfin has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Nelnet and Qfin, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nelnet	1	2	0	0	1.67
Qfin	3	4	1	0	1.75

Nelnet presently has a consensus target price of $125.00, indicating a potential downside of 1.09%. Qfin has a consensus target price of $12.29, indicating a potential upside of 131.42%. Given Qfin’s stronger consensus rating and higher probable upside, analysts plainly believe Qfin is more favorable than Nelnet.

Dividends

Nelnet pays an annual dividend of $1.32 per share and has a dividend yield of 1.0%. Qfin pays an annual dividend of $0.90 per share and has a dividend yield of 16.9%. Nelnet pays out 17.5% of its earnings in the form of a dividend. Qfin pays out 21.6% 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.

Valuation & Earnings

This table compares Nelnet and Qfin”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nelnet	$2.26 billion	2.00	$428.47 million	$7.55	16.74
Qfin	$13.27 billion	0.05	$856.52 million	$4.16	1.28

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

Summary

Qfin beats Nelnet on 10 of the 16 factors compared between the two stocks.

About Nelnet

Nelnet, Inc. is a diversified financial services and education technology company headquartered in Lincoln, Nebraska. Founded in 1978, it initially focused on student loan servicing and has since expanded into services for borrowers, schools, and other organizations. The company provides student loan servicing and related technology, as well as education services such as tuition and payment processing, school administration tools, and online learning resources. Its other businesses include banking and renewable energy services.

About Qfin

Qifu Technology, Inc. (NASDAQ: QFIN), formerly known as 360 DigiTech, operates a digital platform in China that connects consumers seeking credit with financial institutions. The company uses technology and data analysis to support credit assessment and loan matching. Its services include helping partner institutions acquire and assess borrowers, facilitating loan applications and providing support after loans are originated. Qifu also offers technology solutions to financial institutions to assist with their consumer lending operations.