Head-To-Head Analysis: PPDAI Group (NYSE:FINV) vs. SLM (NASDAQ:SLM)

SLM (NASDAQ:SLM) and PPDAI Group (NYSE:FINV) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Institutional and Insider Ownership

98.9% of SLM shares are owned by institutional investors. Comparatively, 31.1% of PPDAI Group shares are owned by institutional investors. 1.4% of SLM shares are owned by insiders. Comparatively, 44.0% of PPDAI Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares SLM and PPDAI Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SLM	26.09%	33.81%	2.51%
PPDAI Group	14.49%	12.31%	7.95%

Valuation & Earnings

This table compares SLM and PPDAI Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SLM	$2.63 billion	1.94	$744.85 million	$3.58	7.56
PPDAI Group	$1.94 billion	0.42	$363.56 million	$1.06	3.19

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

Analyst Recommendations

This is a breakdown of recent ratings for SLM and PPDAI Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SLM	1	6	5	0	2.33
PPDAI Group	1	1	0	0	1.50

SLM currently has a consensus target price of $29.80, indicating a potential upside of 10.04%. PPDAI Group has a consensus target price of $4.10, indicating a potential upside of 21.30%. Given PPDAI Group’s higher probable upside, analysts plainly believe PPDAI Group is more favorable than SLM.

Risk & Volatility

SLM has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, PPDAI Group has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Summary

SLM beats PPDAI Group on 11 of the 14 factors compared between the two stocks.

About SLM

SLM Corporation, through its subsidiaries, originates and services private education loans to students and their families to finance the cost of their education in the United States. It is also involved in the provision of retail deposit accounts, including certificates of deposit, money market accounts, and high-yield savings accounts; and interest-bearing omnibus accounts. The company was formerly known as New BLC Corporation and changed its name to SLM Corporation in December 2013. SLM Corporation was founded in 1972 and is headquartered in Newark, Delaware.

About PPDAI Group

FinVolution Group operates in the online consumer finance industry. The company operates a fintech platform that is empowered by borrowers with financial institutions. It operates in China and internationally. The company was formerly known as PPDAI Group Inc. and changed its name to FinVolution Group in November 2019. FinVolution Group was founded in 2007 and is headquartered in Shanghai, the People’s Republic of China.