Financial Review: OneMain (NYSE:OMF) vs. Mr. Cooper Group (NASDAQ:COOP)

Mr. Cooper Group (NASDAQ:COOP) and OneMain (NYSE:OMF) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Profitability

This table compares Mr. Cooper Group and OneMain’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mr. Cooper Group	25.38%	15.66%	4.22%
OneMain	12.63%	20.65%	2.57%

Risk & Volatility

Mr. Cooper Group has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, OneMain has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Mr. Cooper Group and OneMain, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mr. Cooper Group	0	5	3	0	2.38
OneMain	0	4	6	1	2.73

Mr. Cooper Group presently has a consensus price target of $149.67, indicating a potential downside of 29.00%. OneMain has a consensus price target of $60.14, indicating a potential upside of 8.02%. Given OneMain’s stronger consensus rating and higher probable upside, analysts clearly believe OneMain is more favorable than Mr. Cooper Group.

Dividends

Mr. Cooper Group pays an annual dividend of $2.00 per share and has a dividend yield of 0.9%. OneMain pays an annual dividend of $4.16 per share and has a dividend yield of 7.5%. Mr. Cooper Group pays out 22.9% of its earnings in the form of a dividend. OneMain pays out 75.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OneMain has raised its dividend for 5 consecutive years. OneMain is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

89.8% of Mr. Cooper Group shares are owned by institutional investors. Comparatively, 85.8% of OneMain shares are owned by institutional investors. 1.7% of Mr. Cooper Group shares are owned by insiders. Comparatively, 0.4% of OneMain shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Mr. Cooper Group and OneMain”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mr. Cooper Group	$2.23 billion	6.06	$669.00 million	$8.74	24.12
OneMain	$4.76 billion	1.39	$509.00 million	$5.54	10.05

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

About Mr. Cooper Group

Mr. Cooper Group Inc., together with its subsidiaries, operates as a non-bank servicer of residential mortgage loans in the United States. The company operates through Servicing and Originations segments. The Servicing segment performs activities on behalf of investors or owners of the underlying mortgages and mortgage servicing rights, including collecting and disbursing borrower payments, investor reporting, customer service, modifying loans, performing collections, foreclosures, and the sale of real estate owned. The Originations segment originates residential mortgage loans through its direct-to-consumer and correspondent channels. The company provides its services under the Mr. Cooper and Xome brands. The company was formerly known as WMIH Corp. and changed its name to Mr. Cooper Group Inc. in October 2018. Mr. Cooper Group Inc. was incorporated in 2015 and is based in Coppell, Texas.

About OneMain

OneMain Holdings, Inc., a financial service holding company, engages in the consumer finance and insurance businesses in the United States. It originates, underwrites, and services personal loans secured by automobiles, other titled collateral, or unsecured. The company also offers credit cards; optional credit insurance products, including life, disability, and involuntary unemployment insurance; optional non-credit insurance; guaranteed asset protection coverage as a waiver product or insurance; and membership plans. It sells its products through its website. The company was formerly known as Springleaf Holdings, Inc. and changed its name to OneMain Holdings, Inc. in November 2015. OneMain Holdings, Inc. was founded in 1912 and is based in Evansville, Indiana.