Financial Analysis: LPL Financial (NASDAQ:LPLA) versus Chindata Group (NASDAQ:CD)

Chindata Group (NASDAQ:CD) and LPL Financial (NASDAQ:LPLA) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitability.

Profitability

This table compares Chindata Group and LPL Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chindata Group	N/A	N/A	N/A
LPL Financial	5.13%	32.20%	9.35%

Volatility & Risk

Chindata Group has a beta of 5.23, indicating that its stock price is 423% more volatile than the S&P 500. Comparatively, LPL Financial has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.

Insider & Institutional Ownership

30.8% of Chindata Group shares are owned by institutional investors. Comparatively, 95.7% of LPL Financial shares are owned by institutional investors. 5.5% of Chindata Group shares are owned by company insiders. Comparatively, 0.6% of LPL Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Chindata Group and LPL Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chindata Group	$1.87 million	182.94	-$5.10 million	($0.03)	-103.67
LPL Financial	$16.99 billion	1.62	$863.02 million	$12.54	27.88

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

Analyst Ratings

This is a summary of current recommendations and price targets for Chindata Group and LPL Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chindata Group	1	0	0	0	1.00
LPL Financial	0	5	12	0	2.71

LPL Financial has a consensus target price of $405.79, suggesting a potential upside of 16.07%. Given LPL Financial’s stronger consensus rating and higher probable upside, analysts plainly believe LPL Financial is more favorable than Chindata Group.

Summary

LPL Financial beats Chindata Group on 11 of the 14 factors compared between the two stocks.

About Chindata Group

Chindata Group Holdings Limited provides carrier-neutral hyperscale data center solutions in Mainland China, India, and Southeast Asia. It offers artificial intelligence, cloud computing, smart cities and homes, online entertainment, and other on-demand services. The company also provides internet data center colocation and rental services; and technical and consulting services. Its integrated data center solutions include infrastructure, power supply, connectivity and operation and maintenance, and tailor-made to their scale and requirements throughout the planning, design, construction, and operation process. The company was formerly known as BCPE Bridge Stack Limited and changed its name to Chindata Group Holdings Limited in April 2020. Chindata Group Holdings Limited was founded in 2015 and is headquartered in Beijing, China.

About LPL Financial

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at enterprises in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, fixed income, alternative investments, retirement and 529 education savings plans, and insurance. The company also provides fee-based platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market products; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.