Critical Survey: Autohome (ATHM) vs. Yirendai (YRD)

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

Earnings and Valuation

This table compares Autohome and Yirendai’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Autohome $338.13 million 21.09 $176.85 million $2.20 27.43
Yirendai $466.37 million 5.78 $160.79 million $3.24 13.92

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Autohome and Yirendai, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Autohome 0 0 4 0 3.00
Yirendai 0 0 3 0 3.00

Autohome presently has a consensus target price of $72.27, indicating a potential upside of 19.75%. Yirendai has a consensus target price of $55.00, indicating a potential upside of 21.95%. Given Yirendai’s higher probable upside, analysts plainly believe Yirendai is more favorable than Autohome.

Profitability

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

Net Margins Return on Equity Return on Assets
Autohome 25.52% 23.48% 16.58%
Yirendai 27.09% 70.10% 29.13%

Insider & Institutional Ownership

40.0% of Autohome shares are held by institutional investors. Comparatively, 7.4% of Yirendai shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Yirendai pays an annual dividend of $1.48 per share and has a dividend yield of 3.3%. Autohome does not pay a dividend. Yirendai pays out 45.7% of its earnings in the form of a dividend.

Summary

Yirendai beats Autohome on 7 of the 13 factors compared between the two stocks.

About Autohome

Autohome Inc. is an online destination for automobile consumers in China. The Company is engaged in the provision of online advertising and dealer subscription services in the People’s Republic of China (PRC). The Company, through its Websites, autohome.com.cn and che168.com, and mobile applications, delivers content to automobile buyers and owners. These services are offered to automakers and dealers, and advertising agencies that represent automakers and dealers in the automobile industry. The Company’s autohome.com.cn targets automobile consumers with a focus on new automobiles. The Company’s professionally produced content is created by editorial team and includes automobile-related articles and reviews, pricing trends in various local markets, and photos and video clips. Its database also includes new and used automobile listings and promotional information. Its dealer subscription services allow dealers to market their inventory and services through its Websites.

About Yirendai

Yirendai Ltd. is engaged in online consumer finance marketplace business in China. The Company conducts its business in China, through Yi Ren Heng Ye Technology Development (Beijing) Co., Ltd. (Heng Ye) and its consolidated variable interest entity, Heng Cheng Technology Development (Beijing) Co., Ltd. (Heng Cheng). Heng Cheng operates its Website, www.yirendai.com, and has an Internet content provider (ICP) license as an Internet information provider. Its online marketplace facilitates standard loan products, express loan products and vertical loan products to borrowers. Uses for these loan products include home remodels, durable good purchases, travel and continuing education. Its online marketplace provides investors with various investing tools, such as automated investing tool and self-directed investing tool. It maintains a secondary loan market on its marketplace where investors can transfer the loans they hold prior to maturity at the fair value of the remaining loans.

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