American Express (NYSE:AXP) versus LendingClub (NYSE:LC) Financial Review

American Express (NYSE:AXP) and LendingClub (NYSE:LC) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, risk, profitability and valuation.

Institutional & Insider Ownership

84.3% of American Express shares are held by institutional investors. Comparatively, 74.1% of LendingClub shares are held by institutional investors. 0.1% of American Express shares are held by insiders. Comparatively, 3.2% of LendingClub shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

American Express has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500. Comparatively, LendingClub has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for American Express and LendingClub, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Express	1	10	12	1	2.54
LendingClub	0	2	6	1	2.89

American Express currently has a consensus price target of $373.32, suggesting a potential upside of 11.06%. LendingClub has a consensus price target of $23.07, suggesting a potential upside of 20.10%. Given LendingClub’s stronger consensus rating and higher possible upside, analysts plainly believe LendingClub is more favorable than American Express.

Earnings and Valuation

This table compares American Express and LendingClub”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Express	$72.23 billion	3.14	$10.83 billion	$16.48	20.40
LendingClub	$1.03 billion	2.14	$135.68 million	$1.49	12.89

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

Profitability

This table compares American Express and LendingClub’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Express	15.07%	34.12%	3.77%
LendingClub	16.99%	11.92%	1.55%

Summary

American Express beats LendingClub on 9 of the 14 factors compared between the two stocks.

About American Express

American Express Company, together with its subsidiaries, operates as integrated payments company in the United States, Europe, the Middle East and Africa, the Asia Pacific, Australia, New Zealand, Latin America, Canada, the Caribbean, and Internationally. It operates through four segments: U.S. Consumer Services, Commercial Services, International Card Services, and Global Merchant and Network Services. The company’s products and services include credit card, charge card, banking, and other payment and financing products; network services; expense management products and services; and travel and lifestyle services. It also provides merchant acquisition and processing, servicing and settlement, point-of-sale marketing, and information products and services for merchants; and fraud prevention services, as well as the design and operation of customer loyalty programs. In addition, the company operates lounges at airports under Centurion Lounge brand name. It sells its products and services to consumers, small businesses, mid-sized companies, and large corporations through mobile and online applications, affiliate marketing, customer referral programs, third-party service providers and business partners, direct mail, telephone, in-house sales teams, and direct response advertising. American Express Company was founded in 1850 and is headquartered in New York, New York.

About LendingClub

LendingClub Corporation, operates as a bank holding company, that provides range of financial products and services in the United States. It offers deposit products, including savings accounts, checking accounts, and certificates of deposit. The company also provides loan products, such as consumer loans comprising unsecured personal loans, secured auto refinance loans, and patient and education finance loans; and commercial loans, including small business loans. In addition, it operates an online lending marketplace platform. The company was incorporated in 2006 and is headquartered in San Francisco, California.