Head-To-Head Analysis: NU (NYSE:NU) vs. Yiren Digital (NYSE:YRD)

Yiren Digital (NYSE:YRD) and NU (NYSE:NU) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Dividends

Yiren Digital pays an annual dividend of $0.34 per share and has a dividend yield of 7.3%. NU pays an annual dividend of $1.67 per share and has a dividend yield of 15.2%. Yiren Digital pays out 11.7% of its earnings in the form of a dividend. NU pays out 463.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Yiren Digital and NU’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Yiren Digital	32.37%	20.85%	16.00%
NU	16.28%	28.70%	4.41%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Yiren Digital and NU, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Yiren Digital	0	0	0	0	0.00
NU	1	4	5	0	2.40

NU has a consensus price target of $15.63, indicating a potential upside of 42.38%. Given NU’s stronger consensus rating and higher probable upside, analysts clearly believe NU is more favorable than Yiren Digital.

Insider & Institutional Ownership

2.0% of Yiren Digital shares are held by institutional investors. Comparatively, 84.0% of NU shares are held by institutional investors. 42.2% of Yiren Digital shares are held by insiders. Comparatively, 1.2% of NU shares are held 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.

Earnings & Valuation

This table compares Yiren Digital and NU”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Yiren Digital	$5.63 billion	0.07	$292.99 million	$2.90	1.60
NU	$7.85 billion	6.66	$1.03 billion	$0.36	30.50

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

Volatility and Risk

Yiren Digital has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, NU has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Summary

NU beats Yiren Digital on 11 of the 16 factors compared between the two stocks.

About Yiren Digital

Yiren Digital Ltd. provides financial services through an AI-powered platform in China. Its platform provides a suite of financial and lifestyle services. The company offers financial services, which provides a portfolio of loan products to borrowers; insurance brokerage services; and consumption and lifestyle services, including non-financial products and services to meet various consumer needs. It supports clients at various growth stages, addressing financing needs arising from consumption and production activities, and augmenting the well-being and security of individuals, families, and businesses. The company was formerly known as Yirendai Ltd. and changed its name to Yiren Digital Ltd. in September 2019. Yiren Digital Ltd. was founded in 2012 and is based in Beijing, the People's Republic of China. Yiren Digital Ltd. operates as a subsidiary of CreditEase Holdings (Cayman) Limited.

About NU

Nu Holdings Ltd. provides digital banking platform and digital financial services in Brazil, Mexico, Colombia, and internationally. It offers Nu credit and debit cards; Ultraviolet credit and debit cards; and mobile payment solutions for NuAccount customers to make and receive transfers, pay bills, and make everyday purchases through their mobile phones. The company provides savings solutions, such as Nu Personal Accounts, a digital account solution that supports all personal finance activities, from daily purchases and money transfers to savings; and Nu business accounts designed specifically for entrepreneur customers and their businesses. In addition, it offers NuCrypto, a solution for buying and selling cryptocurrencies through the Nu app; NuInvest, an investment product that provides equity, fixed-income, options, and ETF products, as well as multimarket funds with curated asset allocations based on the customer's risk profile and financial position; personal unsecured loans; in-app buy now pay later' solution for Nu card customers to pay credit and debit purchases, and banking payment slips over time in up to twelve installments; and NuInsurance protecting solutions to help its customers secure life insurance and funeral benefits. The company was founded in 2013 and is headquartered in Sao Paulo, Brazil.