Head to Head Contrast: Yirendai (NYSE:YRD) versus Regional Management (NYSE:RM)

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

Analyst Ratings

This is a summary of current ratings for Regional Management and Yirendai, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regional Management	0	2	2	0	2.50
Yirendai	1	0	0	0	1.00

Regional Management currently has a consensus price target of $43.00, indicating a potential upside of 28.34%. Given Regional Management’s stronger consensus rating and higher possible upside, equities analysts plainly believe Regional Management is more favorable than Yirendai.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Regional Management	6.98%	12.49%	2.25%
Yirendai	-14.35%	-7.58%	-5.21%

Dividends

Regional Management pays an annual dividend of $1.20 per share and has a dividend yield of 3.6%. Yirendai pays an annual dividend of $0.20 per share and has a dividend yield of 19.9%. Regional Management pays out 25.3% of its earnings in the form of a dividend. Yirendai pays out -16.9% 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. Yirendai is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Regional Management has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Yirendai has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Institutional & Insider Ownership

98.9% of Regional Management shares are held by institutional investors. Comparatively, 2.0% of Yirendai shares are held by institutional investors. 10.9% of Regional Management shares are held by insiders. Comparatively, 42.2% of Yirendai shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Regional Management and Yirendai”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regional Management	$579.95 million	0.53	$44.41 million	$4.75	7.05
Yirendai	$817.84 million	0.11	$7.80 million	($1.18)	-0.85

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

Summary

Regional Management beats Yirendai on 11 of the 16 factors compared between the two stocks.

About Regional Management

Regional Management Corp., a diversified consumer finance company, provides various installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders in the United States. It offers small and large installment loans; and retail loans to finance the purchase of furniture, appliances, and other retail products. The company also provides insurance products, including credit life, credit accident and health, credit property, vehicle single interest, and credit involuntary unemployment insurance; collateral protection insurance; and property insurance, as well as reinsurance products. In addition, its loans are sourced through branches, centrally-managed direct mail campaigns, and digital partners, as well as its consumer website. The company was incorporated in 1987 and is headquartered in Greer, South Carolina.

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.