Critical Review: Yirendai (NYSE:YRD) vs. Marchex (NASDAQ:MCHX)

Yirendai (NYSE:YRD) and Marchex (NASDAQ:MCHX) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, dividends and valuation.

Institutional & Insider Ownership

2.0% of Yirendai shares are owned by institutional investors. Comparatively, 73.5% of Marchex shares are owned by institutional investors. 42.2% of Yirendai shares are owned by company insiders. Comparatively, 23.5% of Marchex shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Yirendai and Marchex, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yirendai	0	1	0	0	2.00
Marchex	1	1	0	0	1.50

Dividends

Yirendai pays an annual dividend of $0.40 per share and has a dividend yield of 23.2%. Marchex pays an annual dividend of $0.08 per share and has a dividend yield of 5.2%. Yirendai pays out 1,333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Marchex pays out -66.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Yirendai and Marchex”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yirendai	$817.84 million	0.18	$5.80 million	$0.03	57.57
Marchex	$45.42 million	1.51	-$5.24 million	($0.12)	-12.92

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

Risk & Volatility

Yirendai has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Marchex has a beta of 2.05, indicating that its stock price is 105% more volatile than the S&P 500.

Profitability

This table compares Yirendai and Marchex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yirendai	0.31%	0.18%	0.13%
Marchex	-11.53%	-15.14%	-11.62%

Summary

Yirendai beats Marchex on 10 of the 14 factors compared between the two stocks.

About Yirendai

Yiren Digital Ltd. provides financial services through an AI-powered platform in China. Its platform provides a suite of financial and lifestyle services. The company offers financial services, which provides a portfolio of loan products to borrowers; insurance brokerage services; and consumption and lifestyle services, including non-financial products and services to meet various consumer needs. It supports clients at various growth stages, addressing financing needs arising from consumption and production activities, and augmenting the well-being and security of individuals, families, and businesses. The company was formerly known as Yirendai Ltd. and changed its name to Yiren Digital Ltd. in September 2019. Yiren Digital Ltd. was founded in 2012 and is based in Beijing, the People's Republic of China. Yiren Digital Ltd. operates as a subsidiary of CreditEase Holdings (Cayman) Limited.

About Marchex

Marchex, Inc., a conversation intelligence company, provides conversational analytics and related solutions in the United States, Canada, and internationally. Its products include Marketing Edge that identifies which campaigns and channels are driving inbound conversations, evaluates what happens during those conversations, and closes the sales loop by connecting converted sales to marketing driven leads; Sonar Business Text Messaging, an artificial intelligence (AI) empowered intelligent workflow enabled mobile messaging solution that enables operations, sales, and marketing teams to communicate personally with field staff, prospects, and customers; Marchex Platform Services, a robust API-based conversation intelligence product that allows executives, sales, customer engagement, and marketing teams to apply Marchex AI to most any calls, regardless of communication platform, in order to identify actionable insights from conversations with their customers; Spotlight, an AI conversation analytics product for multi-location businesses; and Engage, a solution that provides locations with applications to enhance their overall performance. The company was incorporated in 2003 and is headquartered in Seattle, Washington.