Encore Capital Group (NASDAQ: ECPG) and Nicholas Financial (NASDAQ:NICK) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.
This is a summary of recent recommendations and price targets for Encore Capital Group and Nicholas Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Encore Capital Group||0||2||3||0||2.60|
Institutional and Insider Ownership
54.6% of Nicholas Financial shares are owned by institutional investors. 8.8% of Encore Capital Group shares are owned by company insiders. Comparatively, 29.6% of Nicholas Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Encore Capital Group and Nicholas Financial’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Encore Capital Group||$1.19 billion||0.95||$83.22 million||$4.01||10.86|
|Nicholas Financial||$90.47 million||0.76||$5.40 million||N/A||N/A|
Encore Capital Group has higher revenue and earnings than Nicholas Financial.
Risk and Volatility
Encore Capital Group has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500. Comparatively, Nicholas Financial has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.
This table compares Encore Capital Group and Nicholas Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Encore Capital Group||6.68%||18.81%||2.49%|
Encore Capital Group beats Nicholas Financial on 9 of the 12 factors compared between the two stocks.
Encore Capital Group Company Profile
Encore Capital Group, Inc., a specialty finance company, together with its subsidiaries, provides debt recovery solutions and other related services for consumers across a range of financial assets worldwide. The company purchases portfolios of defaulted consumer receivables at deep discounts to face value, as well as manages them by working with individuals as they repay their obligations and works toward financial recovery. It is also involved in the debt collection and management activities; and the management of non-performing loans. In addition, the company provides portfolio management services to banks for non-performing loans; and financial solutions to individuals who have previously defaulted on their obligations. Further, it focuses on consumer non-performing loans, including insolvencies, and bank and non-bank receivables. Encore Capital Group, Inc. was founded in 1998 and is headquartered in San Diego, California.
Nicholas Financial Company Profile
Nicholas Financial, Inc. operates as a specialized consumer finance company in the United States. The company engages in acquiring and servicing automobile finance installment contracts for the purchase of new and used automobiles and light trucks. It also originates direct consumer loans and sells consumer-finance related products. The company operates through 65 branch offices located in Alabama, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Michigan, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Nicholas Financial, Inc. was founded in 1986 and is headquartered in Clearwater, Florida.
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