Analyzing loanDepot (NYSE:LDI) and UWM (NYSE:UWMC)

loanDepot (NYSE:LDI) and UWM (NYSE:UWMC) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Valuation & Earnings

This table compares loanDepot and UWM”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
loanDepot	$1.06 billion	0.75	-$98.33 million	($0.36)	-6.65
UWM	$2.16 billion	3.79	$14.40 million	N/A	N/A

UWM has higher revenue and earnings than loanDepot.

Institutional & Insider Ownership

39.4% of loanDepot shares are owned by institutional investors. Comparatively, 53.6% of UWM shares are owned by institutional investors. 83.0% of loanDepot shares are owned by company insiders. Comparatively, 94.1% of UWM 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 loanDepot and UWM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
loanDepot	-6.46%	-22.40%	-1.64%
UWM	0.61%	-6.81%	-0.79%

Analyst Ratings

This is a summary of recent recommendations for loanDepot and UWM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
loanDepot	2	2	0	0	1.50
UWM	1	6	2	0	2.11

loanDepot presently has a consensus price target of $2.58, indicating a potential upside of 7.86%. UWM has a consensus price target of $6.46, indicating a potential upside of 26.13%. Given UWM’s stronger consensus rating and higher possible upside, analysts plainly believe UWM is more favorable than loanDepot.

Volatility and Risk

loanDepot has a beta of 3.45, meaning that its share price is 245% more volatile than the S&P 500. Comparatively, UWM has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500.

Summary

UWM beats loanDepot on 11 of the 12 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 UWM

UWM Holdings Corporation engages in the residential mortgage lending business in the United States. The company offers mortgage loans through wholesale channel. It originates primarily conforming and government loans. UWM Holdings Corporation was founded in 1986 and is headquartered in Pontiac, Michigan.