Comparing Atlanticus (NASDAQ:ATLC) and X Financial (NYSE:XYF)

X Financial (NYSE:XYF) and Atlanticus (NASDAQ:ATLC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Earnings & Valuation

This table compares X Financial and Atlanticus”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
X Financial	$5.60 billion	0.04	$209.43 million	$1.96	2.59
Atlanticus	$538.97 million	2.62	$122.20 million	$7.69	12.10

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for X Financial and Atlanticus, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
X Financial	0	1	0	0	2.00
Atlanticus	0	2	5	1	2.88

Atlanticus has a consensus price target of $129.00, suggesting a potential upside of 38.61%. Given Atlanticus’ stronger consensus rating and higher probable upside, analysts clearly believe Atlanticus is more favorable than X Financial.

Institutional & Insider Ownership

1.1% of X Financial shares are owned by institutional investors. Comparatively, 14.1% of Atlanticus shares are owned by institutional investors. 31.6% of X Financial shares are owned by company insiders. Comparatively, 51.0% of Atlanticus shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk & Volatility

X Financial has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, Atlanticus has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500.

Profitability

This table compares X Financial and Atlanticus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
X Financial	9.94%	9.14%	5.20%
Atlanticus	5.80%	25.17%	2.15%

Summary

Atlanticus beats X Financial on 11 of the 15 factors compared between the two stocks.

About X Financial

X Financial provides personal finance services in the People’s Republic of China. The company offers services as an online marketplace connecting borrowers and investors or institutional funding partners. Its loan products include Xiaoying credit loan, which consists of Xiaoying card loan; and Xiaoying preferred loan to small business owners. The company also offers Xiaoying housing loan, a home equity loan product for property owners; investment products through Xiaoying wealth management platform, such as funds, money market, and insurance products; and loan facilitation services to other platforms. In addition, it engages in the technology development, service, and sale of products; and provision of guarantee and consulting services. The company was incorporated in 2014 and is headquartered in Shenzhen, the People’s Republic of China.

About Atlanticus

Atlanticus Holdings Corporation, a financial technology company, provides credit and related financial services and products to customers the United States. It operates in two segments, Credit as a Service, and Auto Finance. The Credit as a Service segment originates a range of consumer loan products, such as private label and general purpose credit cards originated by lenders through various channels, including retail and healthcare, direct mail solicitation, digital marketing, and partnerships with third parties; and offers credit to their customers for the purchase of various goods and services, including consumer electronics, furniture, elective medical procedures, healthcare, and home-improvements by partnering with retailers, healthcare providers, and other service providers. This segment also offers loan servicing, such as risk management and customer service outsourcing for third parties; and engages in testing and investment activities in consumer finance technology platforms. The Auto Finance segment purchases and/or services loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, and used car business. This segment also provides floor plan financing and installment lending products. It also invests in and services portfolios of credit card receivables. The company was founded in 1996 and is headquartered in Atlanta, Georgia.