Critical Survey: Pra Group (PRAA) vs. Alliance Data Systems (ADS)
Pra Group (NASDAQ: PRAA) and Alliance Data Systems (NYSE:ADS) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.
Insider and Institutional Ownership
94.6% of Alliance Data Systems shares are owned by institutional investors. 2.1% of Pra Group shares are owned by insiders. Comparatively, 2.6% of Alliance Data Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Alliance Data Systems pays an annual dividend of $2.08 per share and has a dividend yield of 0.8%. Pra Group does not pay a dividend. Alliance Data Systems pays out 22.1% of its earnings in the form of a dividend.
Valuation & Earnings
This table compares Pra Group and Alliance Data Systems’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pra Group||$830.58 million||1.90||$85.09 million||$1.24||28.15|
|Alliance Data Systems||$7.14 billion||2.03||$432.30 million||$9.43||27.76|
Alliance Data Systems has higher revenue and earnings than Pra Group. Alliance Data Systems is trading at a lower price-to-earnings ratio than Pra Group, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Pra Group has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500. Comparatively, Alliance Data Systems has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500.
This table compares Pra Group and Alliance Data Systems’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alliance Data Systems||7.09%||62.95%||3.66%|
This is a breakdown of current ratings for Pra Group and Alliance Data Systems, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alliance Data Systems||3||7||9||0||2.32|
Pra Group presently has a consensus price target of $40.00, indicating a potential upside of 14.61%. Alliance Data Systems has a consensus price target of $271.81, indicating a potential upside of 3.82%. Given Pra Group’s higher probable upside, equities research analysts clearly believe Pra Group is more favorable than Alliance Data Systems.
Alliance Data Systems beats Pra Group on 12 of the 16 factors compared between the two stocks.
Pra Group Company Profile
PRA Group, Inc. (PRA Group) is a financial and business services company with operations in the Americas and Europe. The Company’s primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company operates through the account receivables management segment. It also provides fee-based services, such as vehicle location, skip tracing and collateral recovery for auto lenders, government entities and law enforcement; revenue administration, audit and revenue discovery/recovery services for local government entities; class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the United States, and contingent collections of nonperforming loans in Europe and South America. The Company’s portfolio of nonperforming loans includes a set of accounts that can be categorized by asset type, age and size of account, level of previous collection efforts, payment history, and geography.
Alliance Data Systems Company Profile
Alliance Data Systems Corporation is a provider of data-driven marketing and loyalty solutions serving consumer-based businesses in a range of industries. The Company offers a portfolio of integrated outsourced marketing solutions, including customer loyalty programs, database marketing services, end-to-end marketing services, analytics and creative services, direct marketing services, and private label and co-brand retail credit card programs. The Company operates through three segments: LoyaltyOne, which provides coalition and short-term loyalty programs through the Company’s Canadian AIR MILES Reward Program and BrandLoyalty Group B.V. (BrandLoyalty); Epsilon, which provides end-to-end, integrated direct marketing solutions, and Card Services, which provides risk management solutions, account origination, funding, transaction processing, customer care, collections and marketing services for the Company’s private label and co-brand retail credit card programs.
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