Contrasting Yirendai (YRD) & NowAuto Group (OTCMKTS:CAFI)

Yirendai (NYSE:YRD) and NowAuto Group (OTCMKTS:CAFI) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, institutional ownership, dividends, risk, earnings, analyst recommendations and profitability.

Insider & Institutional Ownership

11.0% of Yirendai shares are owned by institutional investors. 42.2% of Yirendai shares are owned by insiders. Comparatively, 11.9% of NowAuto Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Yirendai and NowAuto Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yirendai 0 4 0 0 2.00
NowAuto Group 0 0 0 0 N/A

Yirendai currently has a consensus target price of $35.00, indicating a potential upside of 133.64%. Given Yirendai’s higher probable upside, analysts clearly believe Yirendai is more favorable than NowAuto Group.

Valuation and Earnings

This table compares Yirendai and NowAuto Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Yirendai $817.50 million 1.11 $140.59 million $4.48 3.34
NowAuto Group N/A N/A N/A N/A N/A

Yirendai has higher revenue and earnings than NowAuto Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Yirendai 18.18% 38.20% 22.42%
NowAuto Group N/A N/A N/A

Dividends

Yirendai pays an annual dividend of $0.26 per share and has a dividend yield of 1.7%. NowAuto Group does not pay a dividend. Yirendai pays out 5.8% of its earnings in the form of a dividend.

Risk and Volatility

Yirendai has a beta of 3.48, meaning that its stock price is 248% more volatile than the S&P 500. Comparatively, NowAuto Group has a beta of 2.19, meaning that its stock price is 119% more volatile than the S&P 500.

Summary

Yirendai beats NowAuto Group on 9 of the 10 factors compared between the two stocks.

Yirendai Company Profile

Yirendai Ltd. operates as an online consumer finance marketplace that connects borrowers and investors primarily in the People's Republic of China. It offers standard loan products; and fasttrack loan products through mobile applications. The company also provides investing tools. The company was founded in 2012 and is based in Beijing, the People's Republic of China. Yirendai Ltd. is a subsidiary of Creditease Holdings (Cayman) Limited.

NowAuto Group Company Profile

Consumer Automotive Finance Inc. operates as a retailer in the used vehicle market of the United States. It focuses primarily on the buy here/pay here segment of the independent used vehicle sales and finance market. The company sells approximately 2000 and newer model-year used vehicles and provides related financing through sale type leases. As of December 31, 2010, it had two retail locations in Arizona. The company was formerly known as NowAuto Group, Inc. Consumer Automotive Finance Inc. is based in Las Vegas, Nevada.

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