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

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

Insider & Institutional Ownership

53.6% of UWM shares are owned by institutional investors. Comparatively, 70.2% of Onity Group shares are owned by institutional investors. 94.1% of UWM shares are owned by insiders. Comparatively, 7.6% of Onity Group 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.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UWM	$1.04 billion	0.59	-$13.23 million	($0.02)	-323.50
Onity Group	$1.07 billion	0.22	-$63.70 million	($0.09)	-333.22

UWM has higher earnings, but lower revenue 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.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UWM	1	5	1	0	2.00
Onity Group	0	0	1	1	3.50

UWM currently has a consensus target price of $7.68, indicating a potential upside of 18.68%. Onity Group has a consensus target price of $35.00, indicating a potential upside of 16.71%. Given UWM’s higher probable upside, equities research analysts clearly believe UWM is more favorable than Onity Group.

Risk and Volatility

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

Profitability

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

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

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.

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.