Head to Head Analysis: LendingTree (TREE) and OneMain (OMF)

LendingTree (NASDAQ: TREE) and OneMain (NYSE:OMF) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Institutional and Insider Ownership

72.1% of LendingTree shares are held by institutional investors. Comparatively, 95.9% of OneMain shares are held by institutional investors. 21.9% of LendingTree shares are held by insiders. Comparatively, 57.7% of OneMain shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares LendingTree and OneMain’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LendingTree 5.49% 16.52% 8.79%
OneMain 4.85% 14.15% 2.41%

Valuation and Earnings

This table compares LendingTree and OneMain’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LendingTree $384.40 million 9.48 $27.49 million $2.28 133.47
OneMain $3.88 billion 0.91 $215.00 million $1.26 20.71

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

Analyst Recommendations

This is a summary of current recommendations and price targets for LendingTree and OneMain, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LendingTree 1 0 11 0 2.83
OneMain 0 7 6 0 2.46

LendingTree currently has a consensus price target of $246.09, indicating a potential downside of 19.13%. OneMain has a consensus price target of $32.46, indicating a potential upside of 24.42%. Given OneMain’s higher probable upside, analysts plainly believe OneMain is more favorable than LendingTree.

Risk and Volatility

LendingTree has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500. Comparatively, OneMain has a beta of 2.72, suggesting that its stock price is 172% more volatile than the S&P 500.

Summary

LendingTree beats OneMain on 8 of the 14 factors compared between the two stocks.

LendingTree Company Profile

LendingTree, Inc. (LendingTree) is engaged in operating an online loan marketplace for consumers seeking loans and other credit-based offerings. The Company’s online marketplace provides consumers with access to product offerings from various lenders, which it refers to as Network Lenders, including mortgage loans, home equity loans and lines of credit, reverse mortgage loans, auto loans, credit cards, personal loans, student loans, small business loans and other related offerings. In addition, the Company offers tools and resources, including free credit scores that facilitate comparison shopping for these loans and other credit-based offerings. The Company offers its products in categories, including mortgage products and non-mortgage products. Its mortgage products category includes its purchase and refinance products. Its non-mortgage products include lending products and other products.

OneMain Company Profile

OneMain Holdings, Inc. is a financial services holding company. The Company is a consumer finance company, which is engaged in providing personal loan products; credit and non-credit insurance, and service loans owned by it and service or subservice loans owned by third-parties. The Company’s segments include Consumer and Insurance; Acquisitions and Servicing; Real Estate, and Other. It is engaged in pursuing strategic acquisitions and dispositions of assets and businesses, including loan portfolios or other financial assets. The Company originates and services personal loans (secured and unsecured) through two business divisions: branch operations and centralized operations. As of December 31, 2016, its combined branch operations included over 1,800 branch offices in 44 states. It offers optional credit insurance products to its customers, including credit life insurance, credit disability insurance, credit involuntary unemployment insurance and collateral protection insurance.

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