PHH (NYSE:PHH) & OneMain (OMF) Critical Analysis

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

Risk and Volatility

OneMain has a beta of 2.72, indicating that its stock price is 172% more volatile than the S&P 500. Comparatively, PHH has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500.

Earnings and Valuation

This table compares OneMain and PHH’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OneMain $3.88 billion 0.92 $215.00 million $1.26 20.98
PHH $622.00 million 0.59 -$202.00 million ($5.74) -1.95

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

Analyst Ratings

This is a summary of current recommendations for OneMain and PHH, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OneMain 0 7 6 0 2.46
PHH 0 2 1 0 2.33

OneMain currently has a consensus target price of $32.46, suggesting a potential upside of 22.82%. PHH has a consensus target price of $15.83, suggesting a potential upside of 41.37%. Given PHH’s higher possible upside, analysts plainly believe PHH is more favorable than OneMain.

Profitability

This table compares OneMain and PHH’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OneMain 4.85% 14.15% 2.41%
PHH -71.84% -27.98% -9.33%

Insider and Institutional Ownership

95.9% of OneMain shares are owned by institutional investors. Comparatively, 93.3% of PHH shares are owned by institutional investors. 57.7% of OneMain shares are owned by company insiders. Comparatively, 2.5% of PHH shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

OneMain beats PHH on 12 of the 13 factors compared between the two stocks.

About OneMain

OneMain Holdings, Inc. is a financial services holding company. The Company is a consumer finance company, which is engaged in providing personal loan products; credit and non-credit insurance, and service loans owned by it and service or subservice loans owned by third-parties. The Company’s segments include Consumer and Insurance; Acquisitions and Servicing; Real Estate, and Other. It is engaged in pursuing strategic acquisitions and dispositions of assets and businesses, including loan portfolios or other financial assets. The Company originates and services personal loans (secured and unsecured) through two business divisions: branch operations and centralized operations. As of December 31, 2016, its combined branch operations included over 1,800 branch offices in 44 states. It offers optional credit insurance products to its customers, including credit life insurance, credit disability insurance, credit involuntary unemployment insurance and collateral protection insurance.

About PHH

PHH Corporation is a standalone mortgage company. The Company provides outsourced mortgage banking services to a range of clients, including financial institutions and real estate brokers throughout the United States, and is focused on originating, selling, servicing and subservicing residential mortgage loans through its subsidiary, PHH Mortgage Corporation and its subsidiaries. It operates through two segments: Mortgage Production and Mortgage Servicing. The Mortgage Production segment provides mortgage loan origination services and sells mortgage loans. The Mortgage Servicing segment performs servicing activities for loans originated by the Company and mortgage servicing rights purchased from others, and acts as a subservicer for certain clients that own the underlying mortgage servicing rights. The Mortgage Production segment provides private label mortgage services to financial institutions and real estate brokers, and sources mortgage loans through its retail platform.

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