Contrasting Kingsway Financial Services (NYSE:KWY) and loanDepot (NYSE:LDI)

loanDepot (NYSE:LDI) and Kingsway Financial Services (NYSE:KWY) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Risk & Volatility

loanDepot has a beta of 3.56, suggesting that its stock price is 256% more volatile than the S&P 500. Comparatively, Kingsway Financial Services has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500.

Institutional and Insider Ownership

39.4% of loanDepot shares are owned by institutional investors. Comparatively, 72.4% of Kingsway Financial Services shares are owned by institutional investors. 65.9% of loanDepot shares are owned by company insiders. Comparatively, 41.4% of Kingsway Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for loanDepot and Kingsway Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
loanDepot	3	2	0	0	1.40
Kingsway Financial Services	1	0	0	0	1.00

loanDepot presently has a consensus price target of $1.38, indicating a potential upside of 184.68%. Given loanDepot’s stronger consensus rating and higher possible upside, equities analysts plainly believe loanDepot is more favorable than Kingsway Financial Services.

Profitability

This table compares loanDepot and Kingsway Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
loanDepot	-6.79%	-38.81%	-1.97%
Kingsway Financial Services	-6.53%	-67.61%	-4.43%

Valuation and Earnings

This table compares loanDepot and Kingsway Financial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
loanDepot	$1.19 billion	0.14	-$62.65 million	($0.30)	-1.61
Kingsway Financial Services	$134.97 million	1.81	-$10.73 million	($0.30)	-28.13

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

Summary

loanDepot beats Kingsway Financial Services on 7 of the 11 factors compared between the two stocks.

About loanDepot

loanDepot, Inc. is a U.S.-based residential mortgage lender that originates home loans through digital, direct-to-consumer, retail, and partner channels. The company serves homebuyers and homeowners seeking financing for home purchases, mortgage refinancing, and other residential lending needs. The company offers conventional, government-backed, and jumbo mortgage products, along with home equity lending and related technology-enabled services. loanDepot has also developed digital tools designed to streamline applications, underwriting, closing, and the overall mortgage experience for borrowers and lending partners.

About Kingsway Financial Services

Kingsway Financial Services Inc. (NYSE:KWY) is a Canadian-based holding company that owns and operates businesses in the specialty insurance and insurance-services sectors. Its portfolio includes companies providing specialty insurance products, extended warranty programs, and related administrative and claims services. Historically, Kingsway operated primarily as a specialty insurance provider, including nonstandard automobile insurance businesses in the United States and Canada. The company has since focused on managing and developing a diversified group of insurance and non-insurance subsidiaries, with operations serving customers principally in North America.