Head-To-Head Comparison: Green Dot (GDOT) & LM Funding America (NASDAQ:LMFA)

Green Dot (NYSE:GDOT) and LM Funding America (NASDAQ:LMFA) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Green Dot and LM Funding America, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Green Dot 0 5 7 0 2.58
LM Funding America 0 0 0 0 N/A

Green Dot presently has a consensus price target of $83.46, suggesting a potential upside of 71.31%. Given Green Dot’s higher possible upside, research analysts plainly believe Green Dot is more favorable than LM Funding America.

Valuation & Earnings

This table compares Green Dot and LM Funding America’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Green Dot $1.04 billion 2.48 $118.70 million $2.53 19.26
LM Funding America $3.39 million 1.20 -$470,000.00 N/A N/A

Green Dot has higher revenue and earnings than LM Funding America.

Institutional & Insider Ownership

88.0% of Green Dot shares are held by institutional investors. Comparatively, 5.1% of LM Funding America shares are held by institutional investors. 7.8% of Green Dot shares are held by insiders. Comparatively, 28.0% of LM Funding America shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Green Dot and LM Funding America’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Green Dot 10.56% 15.74% 5.76%
LM Funding America -13.95% -20.77% -15.28%

Volatility and Risk

Green Dot has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, LM Funding America has a beta of 2.8, suggesting that its stock price is 180% more volatile than the S&P 500.

Summary

Green Dot beats LM Funding America on 9 of the 11 factors compared between the two stocks.

Green Dot Company Profile

Green Dot Corporation operates as a financial technology and bank holding company in the United States. It operates in two segments, Account Services, and Processing and Settlement Services. The company offers deposit account programs, such network-branded reloadable prepaid debit cards under the consumer brand names of GPR cards, consumer and small business checking accounts, network-branded gift cards, secured credit cards, and other financial services. It also provides swipe reload system for crediting cash onto an enabled payment card by swiping the payment card at the point-of-sale through Green Dot Network participating retailer; MoneyPak, a product that allows a consumer to add funds to accounts; and e-cash remittance, a service that allows a consumer to transfer funds to a smartphone, as well as offers disbursement services through Simply Paid platform. In addition, the company offers prepaid cards, debit cards, payroll debit cards, consumer cash processing services, wage disbursements, and tax refund processing services, as well as issuing, settlement, and capital management services. Further, it provides mobile banking, loan disbursement accounts, mobile P2P, money transfer, instant payment, and processing and settlement services. The company markets its products under the brand names of Green Dot, GoBank, MoneyPak, AccountNow, RushCard, and RapidPay. Green Dot Corporation markets and sells its products and services through retail stores, various direct-to-consumer Websites, corporate distribution partnerships, tax preparation companies and individual tax preparers, and apps, as well as distributes through ‘Banking as a Service' platform. The company was formerly known as Next Estate Communications, Inc. and changed its name to Green Dot Corporation in October 2005. Green Dot Corporation was incorporated in 1999 and is headquartered in Pasadena, California.

LM Funding America Company Profile

LM Funding America, Inc., through its subsidiary, LM Funding, LLC, operates as a specialty finance company. It provides funding to nonprofit community associations (Associations) primarily located in the state of Florida, as well as in the states of Washington, Colorado, and Illinois. The company offers funding to Associations by purchasing their rights under delinquent accounts that are selected by the Associations arising from unpaid Association assessments. It is also involved in the business of purchasing delinquent accounts on various terms tailored to suit each Association's financial needs, including under its New Neighbor Guaranty program. The company was founded in 2008 and is based in Tampa, Florida.

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