Ditech (NYSE:DHCP) and Ocwen Financial (NYSE:OCN) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, earnings, risk, dividends, institutional ownership, analyst recommendations and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Ditech and Ocwen Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ditech 0 0 0 0 N/A
Ocwen Financial 0 1 0 0 2.00

Ocwen Financial has a consensus target price of $4.00, indicating a potential upside of 41.34%. Given Ocwen Financial’s higher probable upside, analysts clearly believe Ocwen Financial is more favorable than Ditech.

Earnings and Valuation

This table compares Ditech and Ocwen Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ditech $831.26 million 0.00 -$426.89 million N/A N/A
Ocwen Financial $1.19 billion 0.32 -$127.96 million N/A N/A

Ocwen Financial has higher revenue and earnings than Ditech.

Insider & Institutional Ownership

39.3% of Ditech shares are owned by institutional investors. Comparatively, 61.0% of Ocwen Financial shares are owned by institutional investors. 32.0% of Ditech shares are owned by insiders. Comparatively, 0.7% of Ocwen Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Ditech and Ocwen Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ditech N/A N/A N/A
Ocwen Financial -10.97% -13.76% -0.95%

Summary

Ocwen Financial beats Ditech on 5 of the 9 factors compared between the two stocks.

About Ditech

Ditech Holding Corporation operates as an independent servicer and originator of mortgage loans, and servicer of reverse mortgage loans. The company operates through three segments: Servicing, Originations, and Reverse Mortgage. The Servicing segment performs servicing for mortgage loan portfolio, on behalf of third-party credit owners of mortgage loans, as well as performs subservicing for third-party owners. This segment also operates complementary businesses, including asset receivables management that performs collections of post charge-off deficiency balances for third parties; and holds the assets and mortgage-backed debt of the Residual Trusts. The Originations segment originates and purchases mortgage loans through consumer originations, and correspondents and wholesale lendings. The Reverse Mortgage segment primarily focuses on the servicing of its own reverse loans and subservicing on behalf of third-party credit owners of reverse loans. This segment also provides complementary services for the reverse mortgage market, such as real estate owned property management and disposition. It serves government-sponsored entities, government agencies, third-party securitization trusts, and other credit owners. The company was formerly known as Walter Investment Management Corp. and changed its name to Ditech Holding Corporation in February 2018. Ditech Holding Corporation was founded in 1958 and is based in Fort Washington, Pennsylvania.

About Ocwen Financial

Ocwen Financial Corporation, a financial services holding company, originates and services loans in the United States, the United States Virgin Islands, India, and Philippines. Its Servicing segment provides residential and commercial mortgage loan servicing, special servicing, and asset management services to owners of mortgage loans and foreclosed real estate. This segment's residential servicing portfolio includes conventional, government insured, and non-agency loans. The company's Lending segment originates and purchases conventional and government-insured residential forward and reverse mortgage loans primarily through its correspondent lending arrangements, broker relationships, and directly with mortgage customers. The company also provides short-term inventory-secured loans to independent used car dealers to finance their inventory. Ocwen Financial Corporation was founded in 1988 and is headquartered in West Palm Beach, Florida.

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