LexinFintech (NASDAQ:LX) versus Regional Management (NYSE:RM) Head to Head Comparison

Regional Management (NYSE:RM) and LexinFintech (NASDAQ:LX) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.

Dividends

Regional Management pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. LexinFintech pays an annual dividend of $0.31 per share and has a dividend yield of 9.0%. Regional Management pays out 29.1% of its earnings in the form of a dividend. LexinFintech pays out 21.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. LexinFintech is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Regional Management has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, LexinFintech has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Valuation and Earnings

This table compares Regional Management and LexinFintech”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regional Management	$588.50 million	0.66	$41.23 million	$4.13	9.70
LexinFintech	$13.77 billion	0.04	$150.76 million	$1.42	2.43

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Regional Management and LexinFintech, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regional Management	1	2	0	0	1.67
LexinFintech	0	2	0	0	2.00

Regional Management currently has a consensus price target of $30.00, suggesting a potential downside of 25.09%. LexinFintech has a consensus price target of $3.50, suggesting a potential upside of 1.45%. Given LexinFintech’s stronger consensus rating and higher possible upside, analysts clearly believe LexinFintech is more favorable than Regional Management.

Profitability

This table compares Regional Management and LexinFintech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regional Management	6.57%	11.43%	2.12%
LexinFintech	13.28%	16.11%	8.09%

Insider & Institutional Ownership

98.9% of Regional Management shares are held by institutional investors. 10.8% of Regional Management shares are held by company insiders. Comparatively, 27.8% of LexinFintech shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

LexinFintech beats Regional Management on 10 of the 15 factors compared between the two stocks.

About Regional Management

Regional Management Corp., a diversified consumer finance company, provides various installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders in the United States. It offers small and large installment loans; and retail loans to finance the purchase of furniture, appliances, and other retail products. The company also provides insurance products, including credit life, credit accident and health, credit property, vehicle single interest, and credit involuntary unemployment insurance; collateral protection insurance; and property insurance, as well as reinsurance products. In addition, its loans are sourced through branches, centrally-managed direct mail campaigns, and digital partners, as well as its consumer website. The company was incorporated in 1987 and is headquartered in Greer, South Carolina.

About LexinFintech

LexinFintech Holdings Ltd., through its subsidiaries, provides online consumer finance services in the People's Republic of China. The company operates Fenqile.com, an online consumption and consumer finance platform that offers installment purchase and personal installment loans, as well as online direct sales with installment payment terms; and Le Hua Card, a scenario-based lending. It also provides technology-driven platform services for financial institution customers and partners to increase revenues, manage financial risks, enhance operating efficiency and service quality, enhance collections, and reduce overall costs; Maiya application, a location-based services shopping experience with buy-now and pay-later options; and Juzi Licai, an online investment platform. In addition, the company offers technical support and consulting, software development, financing guarantee, and financial technology services. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People's Republic of China.