Head to Head Survey: Medallion Financial (NASDAQ:MFIN) and Yirendai (NYSE:YRD)

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

Risk & Volatility

Yirendai has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Medallion Financial has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Yirendai	-35.36%	-17.30%	-11.97%
Medallion Financial	7.53%	5.32%	0.89%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Yirendai and Medallion Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yirendai	1	0	0	0	1.00
Medallion Financial	1	5	0	0	1.83

Medallion Financial has a consensus price target of $12.62, indicating a potential upside of 25.00%. Given Medallion Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Medallion Financial is more favorable than Yirendai.

Valuation & Earnings

This table compares Yirendai and Medallion Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yirendai	$817.84 million	0.04	$7.80 million	($2.50)	-0.17
Medallion Financial	$353.31 million	0.66	$43.04 million	$1.11	9.10

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

Insider & Institutional Ownership

2.0% of Yirendai shares are owned by institutional investors. Comparatively, 40.6% of Medallion Financial shares are owned by institutional investors. 42.2% of Yirendai shares are owned by insiders. Comparatively, 24.6% of Medallion Financial shares are owned 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.

Summary

Medallion Financial beats Yirendai on 9 of the 12 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 Medallion Financial

Medallion Financial Corp., together with its subsidiaries, operates as a specialty finance company in the United States. It operates in four segments: Recreation Lending, Home Improvement Lending, Commercial Lending, and Taxi Medallion Lending. The company offers loans that finance consumer purchases of recreational vehicles, boats, and other consumer recreational equipment; consumer financing for window, siding, and roof replacement, swimming pool installations, and other home improvement projects; senior and subordinated loans for the purchase of equipment and related assets necessary to open a new business, or purchase or improvement of an existing business; and taxi medallion loans to individuals and small to mid-size businesses. It also provides debt, mezzanine, and equity investment capital to companies in various commercial industries; and raises deposits and conducts other banking activities. Medallion Financial Corp. was incorporated in 1995 and is headquartered in New York City, New York.