Alphabet (NASDAQ:GOOG) and Yirendai (NYSE:YRD) Financial Analysis

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alphabet	$402.84 billion	11.21	$132.17 billion	$13.11	28.42
Yirendai	$817.84 million	0.14	$7.80 million	$0.03	45.17

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

Dividends

Alphabet pays an annual dividend of $0.84 per share and has a dividend yield of 0.2%. Yirendai pays an annual dividend of $0.40 per share and has a dividend yield of 29.5%. Alphabet pays out 6.4% of its earnings in the form of a dividend. 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. Alphabet has increased its dividend for 1 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alphabet	37.92%	38.99%	27.41%
Yirendai	0.31%	0.18%	0.13%

Institutional and Insider Ownership

27.3% of Alphabet shares are owned by institutional investors. Comparatively, 2.0% of Yirendai shares are owned by institutional investors. 13.0% of Alphabet shares are owned by insiders. Comparatively, 42.2% of Yirendai shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Alphabet has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Yirendai has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Alphabet and Yirendai, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alphabet	0	4	28	6	3.05
Yirendai	1	0	0	0	1.00

Alphabet currently has a consensus price target of $378.50, indicating a potential upside of 1.59%. Given Alphabet’s stronger consensus rating and higher probable upside, equities analysts clearly believe Alphabet is more favorable than Yirendai.

Summary

Alphabet beats Yirendai on 15 of the 18 factors compared between the two stocks.

About Alphabet

Alphabet Inc. offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It operates through Google Services, Google Cloud, and Other Bets segments. The Google Services segment provides products and services, including ads, Android, Chrome, devices, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search, and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play and YouTube; and devices, as well as in the provision of YouTube consumer subscription services. The Google Cloud segment offers infrastructure, cybersecurity, databases, analytics, AI, and other services; Google Workspace that include cloud-based communication and collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar, and Meet; and other services for enterprise customers. The Other Bets segment sells healthcare-related and internet services. The company was incorporated in 1998 and is headquartered in Mountain View, California.

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.