Head to Head Comparison: Yirendai (NYSE:YRD) and PROG (NYSE:PRG)

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

Insider and Institutional Ownership

2.0% of Yirendai shares are owned by institutional investors. Comparatively, 97.9% of PROG shares are owned by institutional investors. 42.2% of Yirendai shares are owned by company insiders. Comparatively, 3.7% of PROG shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Yirendai and PROG, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yirendai	1	0	0	0	1.00
PROG	0	3	6	1	2.80

PROG has a consensus price target of $49.44, suggesting a potential upside of 36.72%. Given PROG’s stronger consensus rating and higher probable upside, analysts clearly believe PROG is more favorable than Yirendai.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yirendai	$817.84 million	0.11	$7.80 million	($1.18)	-0.86
PROG	$2.41 billion	0.60	$146.79 million	$3.62	9.99

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Yirendai	-14.35%	-7.58%	-5.21%
PROG	5.57%	21.88%	9.15%

Risk and Volatility

Yirendai has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500. Comparatively, PROG has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500.

Dividends

Yirendai pays an annual dividend of $0.20 per share and has a dividend yield of 19.7%. PROG pays an annual dividend of $0.56 per share and has a dividend yield of 1.5%. Yirendai pays out -16.9% of its earnings in the form of a dividend. PROG pays out 15.5% 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. PROG has increased its dividend for 2 consecutive years. Yirendai is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

PROG beats Yirendai on 15 of the 18 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 PROG

PROG Holdings, Inc. (NYSE:PRG) is a financial technology holding company based in Salt Lake City, Utah with three business segments: Progressive Leasing, which offers lease-to-own transactions primarily to credit-challenged consumers through e-commerce and point-of-sale retail partners, via online, mobile, and in-store solutions; Vive Financial, which provides consumers who may not qualify for traditional prime lending with a variety of second-look, revolving credit products through private label and branded credit cards; and Four Technologies, which provides consumers of all credit backgrounds Buy Now, Pay Later (BNPL) options through four interest-free installments via its platform, Four.