LendingTree (NASDAQ:TREE) & CNFinance (NYSE:CNF) Critical Review

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

Earnings & Valuation

This table compares LendingTree and CNFinance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LendingTree	$900.22 million	0.57	-$41.70 million	($4.13)	-9.24
CNFinance	$205.99 million	0.26	$5.26 million	$0.31	2.55

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LendingTree	-5.67%	14.76%	2.13%
CNFinance	N/A	N/A	N/A

Risk & Volatility

LendingTree has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500. Comparatively, CNFinance has a beta of -0.01, indicating that its stock price is 101% less volatile than the S&P 500.

Institutional and Insider Ownership

68.3% of LendingTree shares are held by institutional investors. 23.1% of LendingTree shares are held by company insiders. Comparatively, 25.8% of CNFinance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for LendingTree and CNFinance, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LendingTree	0	1	7	1	3.00
CNFinance	0	0	0	0	0.00

LendingTree presently has a consensus price target of $64.13, indicating a potential upside of 68.09%. Given LendingTree’s stronger consensus rating and higher probable upside, equities analysts plainly believe LendingTree is more favorable than CNFinance.

Summary

LendingTree beats CNFinance on 10 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 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.