Analyzing Onity Group (NYSE:ONIT) and Rocket Companies (NYSE:RKT)

Rocket Companies (NYSE:RKT) and Onity Group (NYSE:ONIT) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings for Rocket Companies and Onity Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rocket Companies	5	6	0	0	1.55
Onity Group	0	0	1	1	3.50

Rocket Companies presently has a consensus price target of $14.52, indicating a potential downside of 16.99%. Onity Group has a consensus price target of $35.00, indicating a potential upside of 13.77%. Given Onity Group’s stronger consensus rating and higher probable upside, analysts plainly believe Onity Group is more favorable than Rocket Companies.

Institutional and Insider Ownership

4.6% of Rocket Companies shares are owned by institutional investors. Comparatively, 70.2% of Onity Group shares are owned by institutional investors. 93.1% of Rocket Companies shares are owned by company insiders. Comparatively, 7.6% of Onity Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Rocket Companies has a beta of 2.44, meaning that its stock price is 144% more volatile than the S&P 500. Comparatively, Onity Group has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rocket Companies	$4.43 billion	7.86	-$15.51 million	$0.11	159.05
Onity Group	$1.07 billion	0.23	-$63.70 million	$0.53	58.05

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rocket Companies	0.29%	0.90%	0.36%
Onity Group	0.16%	15.54%	0.52%

Summary

Onity Group beats Rocket Companies on 8 of the 15 factors compared between the two stocks.

About Rocket Companies

Rocket Companies, Inc., a fintech holding company, provides mortgage lending, title and settlement services, and other financial technology services in the United States and Canada. It operates through two segments, Direct to Consumer and Partner Network. The company’s solutions include Rocket Mortgage, a mortgage lender; Amrock that provides title insurance, property valuation, and settlement services; Rocket Homes, a home search platform and real estate agent referral network, which offers technology-enabled services to support the home buying and selling experience; and Rocket Loans, an online-based personal loans business. It also offers Core Digital Media, a online marketing platform in the mortgage and personal financial product sectors; Rocket Money, a personal finance app that helps clients manage every aspect of their financial lives; Lendesk, a software services company that provides a point of sale system for mortgage professionals and a loan origination system for private lenders; Rock Connections, a sales and support platform specializing in contact center services; and Rocket Innovation Studio that recruits and mentors top technology talent. In addition, the company originates, closes, sells, and services agency-conforming loans. Rocket Companies, Inc. was founded in 1985 and is headquartered in Detroit, Michigan. The company operates as a subsidiary of Rock Holdings Inc.

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.