Happen Bank (NASDAQ:HAPN – Get Free Report) and Atlanticus (NASDAQ:ATLC – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.
Profitability
This table compares Happen Bank and Atlanticus’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Happen Bank | 20.16% | 13.62% | 1.71% |
| Atlanticus | 5.80% | 25.17% | 2.15% |
Insider and Institutional Ownership
74.1% of Happen Bank shares are held by institutional investors. Comparatively, 14.2% of Atlanticus shares are held by institutional investors. 3.3% of Happen Bank shares are held by company insiders. Comparatively, 51.0% of Atlanticus shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Happen Bank and Atlanticus”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Happen Bank | $998.85 million | 1.92 | $135.68 million | $1.79 | 9.32 |
| Atlanticus | $1.97 billion | 0.77 | $122.20 million | $7.69 | 12.97 |
Happen Bank has higher earnings, but lower revenue than Atlanticus. Happen Bank is trading at a lower price-to-earnings ratio than Atlanticus, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Happen Bank has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Atlanticus has a beta of 1.8, meaning that its stock price is 80% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Happen Bank and Atlanticus, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Happen Bank | 0 | 1 | 3 | 0 | 2.75 |
| Atlanticus | 0 | 2 | 5 | 1 | 2.88 |
Happen Bank currently has a consensus target price of $23.33, suggesting a potential upside of 39.80%. Atlanticus has a consensus target price of $129.00, suggesting a potential upside of 29.32%. Given Happen Bank’s higher probable upside, research analysts clearly believe Happen Bank is more favorable than Atlanticus.
Summary
Atlanticus beats Happen Bank on 10 of the 15 factors compared between the two stocks.
About Happen Bank
Happen Bank, originally founded as LendingClub in 2006, is a digital bank primarily built for high-FICO, high-income borrowers that are actively managing their financial lives. The company offers products to make financial progress both fast and easy. Additionally, the company provides advanced credit underwriting, a proprietary technology platform, and a marketplace bank model intended to drive value for members, loan investors, and shareholders. Happen Bank is headquartered in San Fancisco, California.
About Atlanticus
Atlanticus Holdings Corporation, a financial technology company, provides credit and related financial services and products to customers the United States. It operates in two segments, Credit as a Service, and Auto Finance. The Credit as a Service segment originates a range of consumer loan products, such as private label and general purpose credit cards originated by lenders through various channels, including retail and healthcare, direct mail solicitation, digital marketing, and partnerships with third parties; and offers credit to their customers for the purchase of various goods and services, including consumer electronics, furniture, elective medical procedures, healthcare, and home-improvements by partnering with retailers, healthcare providers, and other service providers. This segment also offers loan servicing, such as risk management and customer service outsourcing for third parties; and engages in testing and investment activities in consumer finance technology platforms. The Auto Finance segment purchases and/or services loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, and used car business. This segment also provides floor plan financing and installment lending products. It also invests in and services portfolios of credit card receivables. The company was founded in 1996 and is headquartered in Atlanta, Georgia.
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