Comparing LendingClub (LC) and Cotiviti (COTV)

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LendingClub (NYSE: LC) and Cotiviti (NYSE:COTV) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Profitability

This table compares LendingClub and Cotiviti’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LendingClub -29.82% -3.78% -0.80%
Cotiviti 21.49% 12.44% 6.65%

Earnings and Valuation

This table compares LendingClub and Cotiviti’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LendingClub $574.54 million 2.72 -$153.83 million ($0.17) -21.71
Cotiviti $678.66 million 6.17 $138.20 million $1.42 31.45

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for LendingClub and Cotiviti, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LendingClub 0 8 6 0 2.43
Cotiviti 0 11 0 0 2.00

LendingClub currently has a consensus target price of $5.71, indicating a potential upside of 54.78%. Cotiviti has a consensus target price of $35.78, indicating a potential downside of 19.89%. Given LendingClub’s stronger consensus rating and higher possible upside, equities research analysts plainly believe LendingClub is more favorable than Cotiviti.

Institutional and Insider Ownership

82.7% of LendingClub shares are owned by institutional investors. Comparatively, 91.5% of Cotiviti shares are owned by institutional investors. 9.7% of LendingClub shares are owned by insiders. Comparatively, 7.5% of Cotiviti shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

LendingClub has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Cotiviti has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Summary

Cotiviti beats LendingClub on 9 of the 14 factors compared between the two stocks.

About LendingClub

LendingClub Corporation operates an online marketplace platform that connects borrowers and investors in the United States. Its marketplace facilitates various types of loan products for consumers and small businesses, including unsecured personal loans, unsecured education and patient finance loans, auto refinance loans, and unsecured small business loans. The company also provides an opportunity to the investors to invest in a range of loans based on term and credit. LendingClub Corporation was founded in 2006 and is headquartered in San Francisco, California.

About Cotiviti

Cotiviti Holdings, Inc., through its subsidiaries, provides analytics-driven payment accuracy and spend management solutions primarily for the healthcare sector in the United States, Canada, the United Kingdom, and India. It operates through two segments, Healthcare, and Global Retail and Other. The company offers prospective claims accuracy solutions that enable healthcare clients identify and address claim discrepancies immediately following claim adjudication and before a claim is paid to a healthcare provider; and retrospective claims accuracy solutions that enable health insurers identify and resolve payment inaccuracies after a claim has been paid to a healthcare provider. It also provides analytics and support services, including anti-fraud, waste, and abuse analytics to identify abnormal patterns in coding and billing practices; surveillance and longitudinal analytics; and claims history analytics to identify areas for direct interaction, as well as to identify policy and program changes that can enhance future payment accuracy. The company was formerly known as Connolly Superholdings, Inc. and changed its name to Cotiviti Holdings, Inc. in September 2015. Cotiviti Holdings, Inc. was founded in 1979 and is headquartered in Atlanta, Georgia.

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