Encore Capital Group (NASDAQ:ECPG – Get Free Report) and PRA Group (NASDAQ:PRAA – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.
Insider and Institutional Ownership
97.1% of PRA Group shares are owned by institutional investors. 2.9% of Encore Capital Group shares are owned by company insiders. Comparatively, 2.0% of PRA Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Encore Capital Group and PRA Group’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Encore Capital Group | $1.40 billion | 0.73 | $194.56 million | ($0.49) | -89.12 |
| PRA Group | $966.52 million | 0.73 | $117.15 million | ($1.50) | -12.03 |
Analyst Ratings
This is a summary of recent ratings for Encore Capital Group and PRA Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Encore Capital Group | 0 | 1 | 3 | 0 | 2.75 |
| PRA Group | 0 | 0 | 1 | 0 | 3.00 |
Encore Capital Group currently has a consensus target price of $62.33, suggesting a potential upside of 45.60%. PRA Group has a consensus target price of $39.00, suggesting a potential upside of 118.12%. Given PRA Group’s stronger consensus rating and higher possible upside, analysts plainly believe PRA Group is more favorable than Encore Capital Group.
Profitability
This table compares Encore Capital Group and PRA Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Encore Capital Group | -0.75% | -0.34% | -0.09% |
| PRA Group | -7.31% | -4.75% | -1.35% |
Risk and Volatility
Encore Capital Group has a beta of 1.45, meaning that its stock price is 45% more volatile than the S&P 500. Comparatively, PRA Group has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.
Summary
Encore Capital Group beats PRA Group on 10 of the 14 factors compared between the two stocks.
About Encore Capital Group
Encore Capital Group, Inc., a specialty finance company, provides debt recovery solutions and other related services for consumers across 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 provision of early stage collection, business process outsourcing, and contingent collection services, as well as debt servicing and other portfolio management services to credit originator for non-performing loans. Encore Capital Group, Inc. was incorporated in 1999 and is headquartered in San Diego, California.
About PRA Group
PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans in the Americas, Europe, and Australia. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies. The company also acquires nonperforming loans, including Visa and MasterCard credit cards, private label and other credit cards, installment loans, lines of credit, deficiency balances of various types, legal judgments, and trade payables from banks, credit unions, consumer finance companies, retailers, utilities, automobile finance companies, and other credit originators. In addition, it provides fee-based services on class action claims recoveries and by servicing consumer bankruptcy accounts. The company was formerly known as Portfolio Recovery Associates, Inc. and changed its name to PRA Group, Inc. in October 2014. PRA Group, Inc. was incorporated in 1996 and is headquartered in Norfolk, Virginia.
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