Lufax (NYSE:LU) versus LexinFintech (NASDAQ:LX) Critical Comparison

Lufax (NYSE:LU) and LexinFintech (NASDAQ:LX) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Lufax and LexinFintech, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lufax	1	2	1	0	2.00
LexinFintech	1	2	0	0	1.67

Lufax currently has a consensus target price of $17.00, suggesting a potential upside of 155.45%. LexinFintech has a consensus target price of $2.35, suggesting a potential upside of 291.01%. Given LexinFintech’s higher probable upside, analysts clearly believe LexinFintech is more favorable than Lufax.

Volatility & Risk

Lufax has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500. Comparatively, LexinFintech has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lufax	$3.77 billion	0.15	-$291.79 million	($4.47)	-1.49
LexinFintech	$1.88 billion	0.05	$239.82 million	$0.84	0.72

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

Profitability

This table compares Lufax and LexinFintech’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lufax	N/A	N/A	N/A
LexinFintech	7.94%	8.59%	4.50%

Institutional and Insider Ownership

69.1% of Lufax shares are held by institutional investors. 27.8% of LexinFintech shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

LexinFintech beats Lufax on 9 of the 14 factors compared between the two stocks.

About Lufax

Lufax Holding Ltd. is a China-based financial technology company that provides technology-enabled financial services. Its platform connects individual and small-business borrowers with financial institutions and other funding partners, helping customers access credit and related services. The company also offers wealth management services, including access to investment products for retail customers. Lufax was established in 2011 as part of Ping An Insurance Group and has developed its business around China’s financial services market.

About LexinFintech

LexinFintech Holdings Ltd. operates a technology-enabled consumer finance platform in China. Its services connect consumers seeking credit with financial institutions and other funding partners. The company’s platform includes Fenqile, an online installment-shopping service, along with consumer credit products and related financial services. LexinFintech uses technology and data analysis to support credit assessment and risk management. Founded in 2013, the company began with Fenqile and serves customers in China.