Financial Analysis: Finance of America Companies (NYSE:FOA) and Onity Group (NYSE:ONIT)

Finance of America Companies (NYSE:FOA) and Onity Group (NYSE:ONIT) 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, institutional ownership, risk, profitability, earnings and valuation.

Insider and Institutional Ownership

97.2% of Finance of America Companies shares are owned by institutional investors. Comparatively, 70.2% of Onity Group shares are owned by institutional investors. 15.6% of Finance of America Companies shares are owned by company insiders. Comparatively, 7.6% of Onity Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Finance of America Companies has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Onity Group has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500.

Profitability

This table compares Finance of America Companies and Onity Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Finance of America Companies	18.89%	-4.76%	-0.04%
Onity Group	1.41%	21.56%	0.71%

Earnings & Valuation

This table compares Finance of America Companies and Onity Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Finance of America Companies	$234.25 million	0.67	-$80.09 million	$11.70	1.36
Onity Group	$1.07 billion	0.23	-$63.70 million	$1.51	20.67

Onity Group has higher revenue and earnings than Finance of America Companies. Finance of America Companies is trading at a lower price-to-earnings ratio than Onity Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Finance of America Companies and Onity Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Finance of America Companies	0	0	2	0	3.00
Onity Group	0	0	1	1	3.50

Finance of America Companies presently has a consensus target price of $17.00, suggesting a potential upside of 6.85%. Onity Group has a consensus target price of $35.00, suggesting a potential upside of 12.14%. Given Onity Group’s stronger consensus rating and higher possible upside, analysts clearly believe Onity Group is more favorable than Finance of America Companies.

Summary

Onity Group beats Finance of America Companies on 9 of the 15 factors compared between the two stocks.

About Finance of America Companies

Finance of America Companies Inc. a financial service holding company, through its subsidiaries, engages in the operation of a retirement solutions platform in the United States. It operates through two segments: Retirement Solutions and Portfolio Management. The Retirement Solutions segment engages in the loan origination activities comprising home equity conversion, proprietary reverse, and hybrid mortgage loans for senior homeowners. The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, servicing oversight, and asset management services for borrowers and investors. The company was founded in 2013 and is headquartered in Plano, Texas.

About Onity Group

Onity Group Inc., a financial services company, originates and services mortgage loans in the United States, the United States Virgin Islands, India, and the Philippines. It operates through, Servicing and Originations segments. The company provides commercial forward mortgage loan servicing, reverse mortgage servicing, special servicing, and asset management services for to owners of mortgage loans and foreclosed real estate, as well as residential mortgage loan servicing, such as forward and reverse conventional, government-insured, and non-agency loans, including the reverse mortgage loans classified as loans. It also originates and purchases conventional and government-insured residential forward and reverse mortgage loans through its correspondent lending arrangements, broker relationships, and retail channels. It serves primarily under the PHH Mortgage and Liberty Reverse Mortgage brands. The company was formerly known as Ocwen Financial Corporation and changed its name to Onity Group Inc. in June 2024. Onity Group Inc. was founded in 1988 and is headquartered in West Palm Beach, Florida.