X Financial (NYSE:XYF) and Atlanticus (NASDAQ:ATLC) Critical Contrast

X Financial (NYSE:XYF) and Atlanticus (NASDAQ:ATLC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, profitability, valuation and institutional ownership.

Insider & Institutional Ownership

1.1% of X Financial shares are owned by institutional investors. Comparatively, 14.2% of Atlanticus shares are owned by institutional investors. 31.6% of X Financial shares are owned by company insiders. Comparatively, 51.0% of Atlanticus shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares X Financial and Atlanticus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
X Financial	9.94%	9.14%	5.20%
Atlanticus	7.65%	27.37%	2.48%

Earnings and Valuation

This table compares X Financial and Atlanticus”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
X Financial	$1.09 billion	0.20	$209.43 million	$1.96	2.81
Atlanticus	$1.97 billion	0.62	$122.20 million	$11.35	6.99

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for X Financial and Atlanticus, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
X Financial	0	1	0	0	2.00
Atlanticus	0	2	5	1	2.88

Atlanticus has a consensus target price of $127.86, suggesting a potential upside of 61.23%. Given Atlanticus’ stronger consensus rating and higher probable upside, analysts plainly believe Atlanticus is more favorable than X Financial.

Volatility and Risk

X Financial has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Atlanticus has a beta of 1.8, suggesting that its stock price is 80% more volatile than the S&P 500.

Summary

Atlanticus beats X Financial on 12 of the 15 factors compared between the two stocks.

About X Financial

X Financial is a China-based financial technology company that operates an online platform for consumer lending. The platform connects individual borrowers seeking credit with financial institutions and other funding partners. Its services include unsecured personal credit products, such as Xiaoying Card Loan, which provides eligible customers with access to online credit. The company uses digital processes to support customer acquisition, credit assessment, loan facilitation and servicing. Founded in 2014, X Financial serves customers in China.

About Atlanticus

Atlanticus Holdings Corporation is a financial technology and consumer finance company that provides credit products to consumers, including people who may have limited access to traditional credit. It works with banks, retailers and other partners to offer credit cards, installment loans and point-of-sale financing. The company’s offerings include general-purpose and private-label credit cards, as well as financing for purchases in areas such as healthcare and home improvement. Atlanticus also provides financing solutions through relationships with auto dealers and other businesses.