Analyzing Rocket Companies (NYSE:RKT) and LendingTree (NASDAQ:TREE)

LendingTree (NASDAQ:TREE) and Rocket Companies (NYSE:RKT) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Valuation and Earnings

This table compares LendingTree and Rocket Companies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LendingTree	$900.22 million	0.56	-$41.70 million	($4.13)	-8.95
Rocket Companies	$5.10 billion	5.57	$29.37 million	($0.03)	-473.43

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

Institutional & Insider Ownership

68.3% of LendingTree shares are owned by institutional investors. Comparatively, 4.6% of Rocket Companies shares are owned by institutional investors. 23.1% of LendingTree shares are owned by insiders. Comparatively, 92.6% of Rocket Companies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares LendingTree and Rocket Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LendingTree	-5.67%	14.76%	2.13%
Rocket Companies	0.06%	3.61%	1.27%

Analyst Recommendations

This is a summary of recent recommendations and price targets for LendingTree and Rocket Companies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LendingTree	0	1	7	1	3.00
Rocket Companies	2	9	1	0	1.92

LendingTree currently has a consensus target price of $64.13, indicating a potential upside of 73.55%. Rocket Companies has a consensus target price of $14.21, indicating a potential upside of 0.04%. Given LendingTree’s stronger consensus rating and higher probable upside, analysts plainly believe LendingTree is more favorable than Rocket Companies.

Volatility & Risk

LendingTree has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500. Comparatively, Rocket Companies has a beta of 2.28, meaning that its share price is 128% more volatile than the S&P 500.

Summary

LendingTree beats Rocket Companies on 8 of the 15 factors compared between the two stocks.

About LendingTree

LendingTree, Inc., through its subsidiary, operates online consumer platform in the United States. It operates through three segments: Home, Consumer, and Insurance. The Home segment offers purchase mortgage, refinance mortgage, and home equity loans and lines of credit; and real estate brokerage services. The Consumer segment provides credit cards; personal, small business, student, and auto loans; deposit accounts; and other credit products, such as debt settlement services. The Insurance segment includes information, tools, and access to insurance quote products, including home, automobile, and health and Medicare through which consumers are matched with insurance lead aggregators to obtain insurance offers and policies. In addition, the company offers QuoteWizard, a marketplace for insurance comparison; ValuePenguin, a personal finance website that offers consumers objective analysis on various financial topics from insurance to credit cards; and Stash, a consumer investing and banking platform that offers a suite of personal investment accounts, traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back rewards program. The company was formerly known as Tree.com, Inc. and changed its name to LendingTree, Inc. in January 2015. LendingTree, Inc. was incorporated in 1996 and is based in Charlotte, North Carolina.

About Rocket Companies

Rocket Companies, Inc., a fintech holding company, provides mortgage lending, title and settlement services, and other financial technology services in the United States and Canada. It operates through two segments, Direct to Consumer and Partner Network. The company’s solutions include Rocket Mortgage, a mortgage lender; Amrock that provides title insurance, property valuation, and settlement services; Rocket Homes, a home search platform and real estate agent referral network, which offers technology-enabled services to support the home buying and selling experience; and Rocket Loans, an online-based personal loans business. It also offers Core Digital Media, a online marketing platform in the mortgage and personal financial product sectors; Rocket Money, a personal finance app that helps clients manage every aspect of their financial lives; Lendesk, a software services company that provides a point of sale system for mortgage professionals and a loan origination system for private lenders; Rock Connections, a sales and support platform specializing in contact center services; and Rocket Innovation Studio that recruits and mentors top technology talent. In addition, the company originates, closes, sells, and services agency-conforming loans. Rocket Companies, Inc. was founded in 1985 and is headquartered in Detroit, Michigan. The company operates as a subsidiary of Rock Holdings Inc.