Comparing Evertec (NYSE:EVTC) and loanDepot (NYSE:LDI)

loanDepot (NYSE:LDI) and Evertec (NYSE:EVTC) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitability and earnings.

Earnings & Valuation

This table compares loanDepot and Evertec”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
loanDepot	$1.19 billion	0.16	-$62.65 million	($0.30)	-1.89
Evertec	$931.82 million	1.90	$141.59 million	$1.54	19.26

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

Insider & Institutional Ownership

39.4% of loanDepot shares are held by institutional investors. Comparatively, 96.8% of Evertec shares are held by institutional investors. 65.9% of loanDepot shares are held by company insiders. Comparatively, 1.1% of Evertec shares are held by company 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 loanDepot and Evertec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
loanDepot	-5.52%	-28.25%	-1.56%
Evertec	9.80%	32.07%	9.12%

Volatility and Risk

loanDepot has a beta of 3.45, suggesting that its stock price is 245% more volatile than the S&P 500. Comparatively, Evertec has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for loanDepot and Evertec, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
loanDepot	2	2	0	0	1.50
Evertec	0	4	2	0	2.33

loanDepot currently has a consensus target price of $1.38, suggesting a potential upside of 142.08%. Evertec has a consensus target price of $35.00, suggesting a potential upside of 18.02%. Given loanDepot’s higher possible upside, equities analysts plainly believe loanDepot is more favorable than Evertec.

Summary

Evertec beats loanDepot on 10 of the 14 factors compared between the two stocks.

About loanDepot

loanDepot, Inc. engages in originating, financing, selling, and servicing residential mortgage loans in the United States. The company offers conventional agency-conforming and prime jumbo, federal assistance residential mortgage, and home equity loans. It also provides settlement services, which include captive title and escrow business; real estate services that cover captive real estate referral business; and insurance services, including services to homeowners, as well as other consumer insurance policies. The company was founded in 2010 and is headquartered in Irvine, California.

About Evertec

EVERTEC, Inc. engages in transaction processing business and financial technology in Latin America and the Caribbean. The company operates through four segments: Payment Services – Puerto Rico & Caribbean; Latin America Payments and Solutions; Merchant Acquiring; and Business Solutions. It provides merchant acquiring services, which enable point of sales and e-commerce merchants to accept and process electronic methods of payment, such as debit, credit, prepaid, and electronic benefit transfer (EBT) cards. In addition, the company offers payment processing services that enable financial institutions and other issuers to manage, support, and facilitate the processing for credit, debit, prepaid, automated teller machines, and EBT card programs; credit and debit card processing, authorization and settlement, and fraud monitoring and control services to debit or credit issuers services. Further, it provides business process management solutions comprising core bank processing, network hosting and management, IT professional, business process outsourcing, item and cash processing, and fulfillment solutions to merchant, fintech, financial institutions, and corporate and government customers. Additionally, the company owns and operates the ATH network, a personal identification number debit networks. It manages a system of electronic payment networks that process approximately six billion transactions. The company sells and distributes its services primarily through direct sales force. It serves financial institutions, merchants, corporations, and government agencies. EVERTEC, Inc. was founded in 1988 and is headquartered in San Juan, Puerto Rico.