Head to Head Review: Yirendai (NYSE:YRD) and Cango (NYSE:CANG)

Cango (NYSE:CANG) and Yirendai (NYSE:YRD) are both small-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

4.2% of Cango shares are held by institutional investors. Comparatively, 2.0% of Yirendai shares are held by institutional investors. 29.1% of Cango shares are held by insiders. Comparatively, 42.2% of Yirendai shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Cango and Yirendai’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cango	-46.40%	2.29%	1.31%
Yirendai	20.19%	12.66%	8.93%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cango	$110.21 million	1.23	$41.07 million	($1.30)	-0.50
Yirendai	$795.41 million	0.38	$216.77 million	$1.99	1.77

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

Volatility & Risk

Cango has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Yirendai has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Cango and Yirendai, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cango	1	1	1	1	2.50
Yirendai	0	1	0	0	2.00

Cango presently has a consensus price target of $3.00, indicating a potential upside of 358.72%. Given Cango’s stronger consensus rating and higher possible upside, research analysts clearly believe Cango is more favorable than Yirendai.

Summary

Yirendai beats Cango on 9 of the 15 factors compared between the two stocks.

About Cango

Cango Inc. operates an automotive transaction service platform that connects dealers, original equipment manufacturers, financial institutions, car buyers, insurance brokers, and companies in the People's Republic of China. The company offers automobile trading solutions comprising car sourcing, transaction facilitation, logistics, and warehousing support for dealers through Cango Haoche app that offers new car transaction services, and Cango U-Car app that offers used-car transaction services. It also provides automotive financing facilitation services that include facilitating financing transactions from financial institutions to car buyers, which comprises credit origination, credit assessment, credit servicing, and delinquent asset management services; facilitating financing transactions of car purchases for car buyers; and after-market services to car buyers, which includes facilitating the sale of insurance policies from insurance brokers or companies. The company was founded in 2010 and is headquartered in Shanghai, the People's Republic of China.

About Yirendai

Yiren Digital Ltd. provides financial services through an AI-powered platform in China. Its platform provides a suite of financial and lifestyle services. The company offers financial services, which provides a portfolio of loan products to borrowers; insurance brokerage services; and consumption and lifestyle services, including non-financial products and services to meet various consumer needs. It supports clients at various growth stages, addressing financing needs arising from consumption and production activities, and augmenting the well-being and security of individuals, families, and businesses. The company was formerly known as Yirendai Ltd. and changed its name to Yiren Digital Ltd. in September 2019. Yiren Digital Ltd. was founded in 2012 and is based in Beijing, the People's Republic of China. Yiren Digital Ltd. operates as a subsidiary of CreditEase Holdings (Cayman) Limited.