Yirendai (NYSE:YRD) & HealthStream (NASDAQ:HSTM) Critical Review

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

Dividends

Yirendai pays an annual dividend of $0.40 per share and has a dividend yield of 23.6%. HealthStream pays an annual dividend of $0.14 per share and has a dividend yield of 0.7%. Yirendai pays out 1,333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HealthStream pays out 23.0% of its earnings in the form of a dividend. HealthStream has raised its dividend for 2 consecutive years.

Volatility & Risk

Yirendai has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Institutional & Insider Ownership

2.0% of Yirendai shares are held by institutional investors. Comparatively, 69.6% of HealthStream shares are held by institutional investors. 42.2% of Yirendai shares are held by insiders. Comparatively, 20.5% of HealthStream shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Yirendai	0.31%	0.18%	0.13%
HealthStream	6.03%	5.98%	4.14%

Valuation & Earnings

This table compares Yirendai and HealthStream”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yirendai	$817.84 million	0.18	$5.80 million	$0.03	56.50
HealthStream	$304.06 million	2.06	$18.34 million	$0.61	34.59

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Yirendai and HealthStream, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yirendai	0	1	0	0	2.00
HealthStream	1	2	0	0	1.67

HealthStream has a consensus price target of $25.00, indicating a potential upside of 18.48%. Given HealthStream’s higher possible upside, analysts clearly believe HealthStream is more favorable than Yirendai.

Summary

HealthStream beats Yirendai on 10 of the 16 factors compared between the two stocks.

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.

About HealthStream

HealthStream, Inc. provides Software-as-a-Service (SaaS) based applications for healthcare organizations in the United States. The company’s solutions help healthcare organizations in meeting their ongoing clinical development, talent management, training, education, assessment, competency management, safety and compliance, and scheduling, as well as provider credentialing, privileging, and enrollment needs. It offers hStream, a technology platform that powers a range of healthcare workforce solutions. The company provides its solutions to customers across a range of entities within the healthcare industry, including private, not-for-profit, and government entities, as well as pharmaceutical and medical device companies through its direct sales teams. The company was incorporated in 1990 and is headquartered in Nashville, Tennessee.