Head to Head Contrast: Lufax (NYSE:LU) versus SLM (NASDAQ:SLM)

Lufax (NYSE:LU) and SLM (NASDAQ:SLM) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

69.1% of Lufax shares are held by institutional investors. Comparatively, 98.9% of SLM shares are held by institutional investors. 1.4% of SLM shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Lufax and SLM, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lufax	2	0	1	0	1.67
SLM	1	6	5	0	2.33

Lufax currently has a consensus target price of $2.00, indicating a potential upside of 27.63%. SLM has a consensus target price of $29.80, indicating a potential upside of 10.90%. Given Lufax’s higher possible upside, analysts clearly believe Lufax is more favorable than SLM.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lufax	$3.77 billion	0.36	-$291.79 million	($0.78)	-2.01
SLM	$2.63 billion	1.92	$744.85 million	$3.58	7.51

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Lufax	N/A	N/A	N/A
SLM	26.09%	33.81%	2.51%

Volatility & Risk

Lufax has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, SLM has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.

Summary

SLM beats Lufax on 12 of the 14 factors compared between the two stocks.

About Lufax

Lufax Holding Ltd operates as a financial service empowering institution for small and micro businesses in China. The company offers loan products, including general unsecured loans and secured loans, as well as consumer finance loans. It also provides wealth management products, such as asset management plans, mutual fund products, private investment fund products, and trust products. The company was founded in 2005 and is headquartered in Shanghai, China.

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.