Head to Head Comparison: Nelnet (NYSE:NNI) vs. Qfin (NASDAQ:QFIN)

Qfin (NASDAQ:QFIN) and Nelnet (NYSE:NNI) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Risk and Volatility

Qfin has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Nelnet has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Dividends

Qfin pays an annual dividend of $0.90 per share and has a dividend yield of 16.9%. Nelnet pays an annual dividend of $1.32 per share and has a dividend yield of 1.0%. Qfin pays out 21.6% of its earnings in the form of a dividend. Nelnet pays out 17.5% 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.

Profitability

This table compares Qfin and Nelnet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Qfin	22.23%	15.23%	6.60%
Nelnet	12.93%	7.15%	1.82%

Institutional and Insider Ownership

74.8% of Qfin shares are owned by institutional investors. Comparatively, 33.5% of Nelnet shares are owned by institutional investors. 17.1% of Qfin shares are owned by insiders. Comparatively, 40.3% of Nelnet shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Qfin and Nelnet, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Qfin	3	4	1	0	1.75
Nelnet	1	2	0	0	1.67

Qfin currently has a consensus price target of $12.29, suggesting a potential upside of 131.42%. Nelnet has a consensus price target of $125.00, suggesting a potential downside of 1.09%. Given Qfin’s stronger consensus rating and higher possible upside, equities analysts plainly believe Qfin is more favorable than Nelnet.

Earnings and Valuation

This table compares Qfin and Nelnet”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Qfin	$13.27 billion	0.05	$856.52 million	$4.16	1.28
Nelnet	$2.26 billion	2.00	$428.47 million	$7.55	16.74

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

Summary

Qfin beats Nelnet on 10 of the 16 factors compared between the two stocks.

About Qfin

Qifu Technology, Inc. (NASDAQ: QFIN), formerly known as 360 DigiTech, operates a digital platform in China that connects consumers seeking credit with financial institutions. The company uses technology and data analysis to support credit assessment and loan matching. Its services include helping partner institutions acquire and assess borrowers, facilitating loan applications and providing support after loans are originated. Qifu also offers technology solutions to financial institutions to assist with their consumer lending operations.

About Nelnet

Nelnet, Inc. is a diversified financial services and education technology company headquartered in Lincoln, Nebraska. Founded in 1978, it initially focused on student loan servicing and has since expanded into services for borrowers, schools, and other organizations. The company provides student loan servicing and related technology, as well as education services such as tuition and payment processing, school administration tools, and online learning resources. Its other businesses include banking and renewable energy services.