Encore Capital Group (NASDAQ: ECPG) and CPI Card Group (NASDAQ:PMTS) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.
This table compares Encore Capital Group and CPI Card Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Encore Capital Group||7.01%||18.70%||2.59%|
|CPI Card Group||-8.64%||N/A||-1.39%|
11.6% of CPI Card Group shares are owned by institutional investors. 8.8% of Encore Capital Group shares are owned by company insiders. Comparatively, 5.0% of CPI Card Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Encore Capital Group and CPI Card Group’s gross 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||0.97||$83.22 million||$4.01||11.12|
|CPI Card Group||$254.86 million||0.11||-$22.01 million||($0.31)||-8.23|
Encore Capital Group has higher revenue and earnings than CPI Card Group. CPI Card Group is trading at a lower price-to-earnings ratio than Encore Capital Group, indicating that it is currently the more affordable of the two stocks.
CPI Card Group pays an annual dividend of $0.22 per share and has a dividend yield of 8.6%. Encore Capital Group does not pay a dividend. CPI Card Group pays out -71.0% of its earnings in the form of a dividend.
This is a summary of current ratings for Encore Capital Group and CPI Card Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Encore Capital Group||0||2||3||0||2.60|
|CPI Card Group||1||4||0||0||1.80|
Encore Capital Group presently has a consensus target price of $51.63, suggesting a potential upside of 15.75%. CPI Card Group has a consensus target price of $5.75, suggesting a potential upside of 125.49%. Given CPI Card Group’s higher possible upside, analysts plainly believe CPI Card Group is more favorable than Encore Capital Group.
Risk and Volatility
Encore Capital Group has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500. Comparatively, CPI Card Group has a beta of -0.56, meaning that its share price is 156% less volatile than the S&P 500.
Encore Capital Group beats CPI Card Group on 12 of the 16 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.
CPI Card Group Company Profile
CPI Card Group Inc., formerly CPI Holdings I, Inc., provides Financial Payment Card solutions in North America. The Company is engaged in the design, production, data personalization, packaging and fulfillment of Financial Payment Cards, which it defines as credit cards, debit cards and prepaid debit cards issued on the networks of the Payment Card Brands in the United States, Europe and Canada. It is also engaged in the design, production, data personalization, packaging and fulfillment of retail gift and loyalty cards. Its segments include U.S. Debit and Credit, which produces Financial Payment Cards and provides integrated card services to card-issuing banks in the United States; U.S. Prepaid Debit, which provides integrated card services to Prepaid Debit Card issuers in the United States; U.K. Limited, which produces retail cards for customers in the United Kingdom and continental Europe, and Other, which has operations in Ontario, Canada and Petersfield, United Kingdom.
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