Head-To-Head Review: CNFinance (NYSE:CNF) versus StoneCo (NASDAQ:STNE)

StoneCo (NASDAQ:STNE) and CNFinance (NYSE:CNF) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Volatility and Risk

StoneCo has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500. Comparatively, CNFinance has a beta of -0.14, suggesting that its stock price is 114% less volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
StoneCo	$2.53 billion	0.96	$425.73 million	$2.48	3.96
CNFinance	$80.76 million	0.17	-$65.43 million	$2.20	0.90

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

Institutional and Insider Ownership

73.2% of StoneCo shares are owned by institutional investors. 11.3% of StoneCo shares are owned by insiders. Comparatively, 25.8% of CNFinance shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares StoneCo and CNFinance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
StoneCo	22.92%	22.19%	4.10%
CNFinance	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current recommendations and price targets for StoneCo and CNFinance, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
StoneCo	0	6	4	0	2.40
CNFinance	1	1	0	0	1.50

StoneCo currently has a consensus price target of $14.30, suggesting a potential upside of 45.62%. Given StoneCo’s stronger consensus rating and higher possible upside, equities analysts clearly believe StoneCo is more favorable than CNFinance.

Summary

StoneCo beats CNFinance on 13 of the 14 factors compared between the two stocks.

About StoneCo

StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team. The company served small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands.

About CNFinance

CNFinance Holdings Limited, through its subsidiaries, provides home equity loan services in the People's Republic of China. It offers micro credit loan services for micro and small-enterprise owners; and loan lending agency services for financial institutions. The company provides bridge loan products, which are unsecured short-term loans to pay off borrowers' existing loans secured by real property. It operates approximately 87 branches and sub-branches in China. The company was founded in 1999 and is headquartered in Guangzhou, the People's Republic of China.