loanDepot (NYSE:LDI – Get Free Report) and Finance of America Companies (NYSE:FOA – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, institutional ownership, analyst recommendations and profitability.
Institutional & Insider Ownership
39.4% of loanDepot shares are owned by institutional investors. Comparatively, 97.2% of Finance of America Companies shares are owned by institutional investors. 78.1% of loanDepot shares are owned by company insiders. Comparatively, 25.0% of Finance of America Companies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares loanDepot and Finance of America Companies”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| loanDepot | $1.06 billion | 0.40 | -$98.33 million | ($0.45) | -2.88 |
| Finance of America Companies | $338.17 million | 0.74 | $15.49 million | $3.68 | 6.12 |
Finance of America Companies has lower revenue, but higher earnings than loanDepot. loanDepot is trading at a lower price-to-earnings ratio than Finance of America Companies, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and target prices for loanDepot and Finance of America Companies, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| loanDepot | 1 | 1 | 0 | 0 | 1.50 |
| Finance of America Companies | 0 | 1 | 1 | 0 | 2.50 |
loanDepot presently has a consensus price target of $1.98, indicating a potential upside of 52.51%. Finance of America Companies has a consensus price target of $26.25, indicating a potential upside of 16.53%. Given loanDepot’s higher probable upside, analysts clearly believe loanDepot is more favorable than Finance of America Companies.
Profitability
This table compares loanDepot and Finance of America Companies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| loanDepot | -7.74% | -18.41% | -1.57% |
| Finance of America Companies | 18.89% | -3.12% | -0.04% |
Volatility & Risk
loanDepot has a beta of 3.39, meaning that its share price is 239% more volatile than the S&P 500. Comparatively, Finance of America Companies has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.
Summary
Finance of America Companies beats loanDepot on 10 of the 14 factors compared between the two stocks.
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.
About Finance of America Companies
Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.
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