Head to Head Contrast: Lendingclub (NASDAQ:HAPN) & Consumer Portfolio Services (NASDAQ:CPSS)

Lendingclub (NASDAQ:HAPN) and Consumer Portfolio Services (NASDAQ:CPSS) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Lendingclub and Consumer Portfolio Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lendingclub	0	1	2	0	2.67
Consumer Portfolio Services	0	1	0	0	2.00

Lendingclub currently has a consensus target price of $25.00, suggesting a potential upside of 72.29%. Given Lendingclub’s stronger consensus rating and higher probable upside, equities analysts clearly believe Lendingclub is more favorable than Consumer Portfolio Services.

Profitability

This table compares Lendingclub and Consumer Portfolio Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lendingclub	18.67%	12.92%	1.66%
Consumer Portfolio Services	4.78%	6.91%	0.54%

Institutional and Insider Ownership

74.1% of Lendingclub shares are owned by institutional investors. Comparatively, 47.6% of Consumer Portfolio Services shares are owned by institutional investors. 3.3% of Lendingclub shares are owned by insiders. Comparatively, 63.8% of Consumer Portfolio Services shares are owned by 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.

Volatility & Risk

Lendingclub has a beta of 1.88, meaning that its stock price is 88% more volatile than the S&P 500. Comparatively, Consumer Portfolio Services has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500.

Valuation & Earnings

This table compares Lendingclub and Consumer Portfolio Services”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lendingclub	$998.85 million	1.68	$135.68 million	$1.66	8.74
Consumer Portfolio Services	$434.47 million	0.47	$19.33 million	$0.92	10.05

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

Summary

Lendingclub beats Consumer Portfolio Services on 12 of the 14 factors compared between the two stocks.

About Lendingclub

LendingClub Corporation, operates as a bank holding company for LendingClub Bank, National Association that provides range of financial products and services through a technology-driven platform in the United States. The company provides commercial and industrial, commercial real estate, small business, and equipment loans, as well as leases equipment; and unsecured personal and auto, patient finance, and education finance loans. It also operates an online lending marketplace platform that connects borrowers and investors. LendingClub Corporation was incorporated in 2006 and is headquartered in San Francisco, California.

About Consumer Portfolio Services

Consumer Portfolio Services, Inc. operates as a specialty finance company in the United States. It is involved in the purchase and service of retail automobile contracts originated by franchised automobile dealers and select independent dealers in the sale of new and used automobiles, light trucks, and passenger vans. The company, through its automobile contract purchases, offers indirect financing to the customers of dealers with limited credit histories or past credit problems. It also serves as an alternative source of financing for dealers, facilitating sales to customers who are not able to obtain financing from commercial banks, credit unions, and the captive finance companies. In addition, the company acquires installment purchase contracts in merger and acquisition transactions; purchases immaterial amounts of vehicle purchase money loans from non-affiliated lenders. It services its automobile contracts through its branches in California, Nevada, Virginia, Florida, and Illinois. The company was incorporated in 1991 and is based in Las Vegas, Nevada.