Analyzing Onity Group (NYSE:ONIT) & UWM (NYSE:UWMC)

Onity Group (NYSE:ONIT) and UWM (NYSE:UWMC) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.

Institutional and Insider Ownership

70.2% of Onity Group shares are held by institutional investors. Comparatively, 53.6% of UWM shares are held by institutional investors. 7.6% of Onity Group shares are held by company insiders. Comparatively, 94.1% of UWM shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Onity Group and UWM, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Onity Group	0	0	1	1	3.50
UWM	1	6	1	0	2.00

Onity Group currently has a consensus target price of $35.00, suggesting a potential upside of 12.14%. UWM has a consensus target price of $7.66, suggesting a potential upside of 22.89%. Given UWM’s higher possible upside, analysts clearly believe UWM is more favorable than Onity Group.

Profitability

This table compares Onity Group and UWM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Onity Group	0.16%	15.54%	0.52%
UWM	N/A	2.88%	0.60%

Volatility and Risk

Onity Group has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500. Comparatively, UWM has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.

Valuation and Earnings

This table compares Onity Group and UWM”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Onity Group	$1.07 billion	0.23	-$63.70 million	($0.09)	-346.78
UWM	$1.04 billion	0.57	-$13.23 million	($0.02)	-311.50

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

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.

About UWM

UWM Holdings Corporation engages in the residential mortgage lending business in the United States. The company offers mortgage loans through wholesale channel. It originates primarily conforming and government loans. UWM Holdings Corporation was founded in 1986 and is headquartered in Pontiac, Michigan.