The Federal Reserve yesterday signaled that it might raise interest rates next year. And because a higher-rate environment aids the financial sector, LoanDepot (LDI) and CURO Group Holdings (CURO) should benefit. But which of these two stocks is a better buy now? Read more to find out.LoanDepot, Inc. (LDI), in Foothill Ranch, Calif., is a customer-centric and technology-enabled residential mortgage platform. In addition, its technology platform, mello, functions across all aspects of its business, including lead generation, origination, and data integration. In comparison, diversified consumer finance company CURO Group Holdings Corp. (CURO) offers unsecured installment loans, secured installment loans, open-end loans, and single-pay loans. CURO is based in Wichita, Kans.
Even though interest rates have been held near zero for an extended period, the financial sector rebounded significantly earlier this year as the economy gradually recovered on the back of solid progress on the COVID-19 vaccination front. In addition, following the Federal Reserve’s announcement yesterday, half of the United States Federal Reserve policymakers now expect to start raising interest rates next year, which should bode well for the financial sector. So, LDI and CURO could benefit.
LDI has declined 12.9% in price over the past month, while CURO has lost 1%. Also, in terms of the past six months’ performance, CURO is the clear winner with 9.5% gains versus LDI’s negative returns.