Head-To-Head Comparison: loanDepot (NYSE:LDI) and Evertec (NYSE:EVTC)

Evertec (NYSE:EVTC) and loanDepot (NYSE:LDI) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Earnings & Valuation

This table compares Evertec and loanDepot”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Evertec	$996.16 million	1.85	$141.59 million	$1.54	20.01
loanDepot	$1.19 billion	0.14	-$62.65 million	($0.30)	-1.65

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

Risk & Volatility

Evertec has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, loanDepot has a beta of 3.45, suggesting that its share price is 245% more volatile than the S&P 500.

Profitability

This table compares Evertec and loanDepot’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Evertec	9.80%	32.07%	9.12%
loanDepot	-5.52%	-28.25%	-1.56%

Analyst Recommendations

This is a summary of current recommendations and price targets for Evertec and loanDepot, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Evertec	0	4	2	0	2.33
loanDepot	2	2	0	0	1.50

Evertec currently has a consensus price target of $35.00, indicating a potential upside of 13.56%. loanDepot has a consensus price target of $1.38, indicating a potential upside of 177.22%. Given loanDepot’s higher possible upside, analysts clearly believe loanDepot is more favorable than Evertec.

Insider & Institutional Ownership

96.8% of Evertec shares are owned by institutional investors. Comparatively, 39.4% of loanDepot shares are owned by institutional investors. 1.1% of Evertec shares are owned by insiders. Comparatively, 65.9% of loanDepot shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Evertec beats loanDepot on 10 of the 14 factors compared between the two stocks.

About Evertec

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.

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.