Encore Capital Group (NASDAQ:ECPG) versus EZCORP (NASDAQ:EZPW) Critical Survey

Encore Capital Group (NASDAQ:ECPG) and EZCORP (NASDAQ:EZPW) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares Encore Capital Group and EZCORP”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Encore Capital Group	$1.32 billion	0.92	-$139.24 million	($1.83)	-29.80
EZCORP	$1.27 billion	0.94	$109.61 million	$1.41	13.91

EZCORP has lower revenue, but higher earnings than Encore Capital Group. Encore Capital Group is trading at a lower price-to-earnings ratio than EZCORP, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Encore Capital Group has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, EZCORP has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Profitability

This table compares Encore Capital Group and EZCORP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Encore Capital Group	-2.89%	25.27%	4.30%
EZCORP	8.60%	12.00%	6.18%

Analyst Recommendations

This is a summary of recent ratings and price targets for Encore Capital Group and EZCORP, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Encore Capital Group	1	0	3	1	2.80
EZCORP	0	2	5	1	2.88

Encore Capital Group presently has a consensus price target of $61.67, suggesting a potential upside of 13.09%. EZCORP has a consensus price target of $20.50, suggesting a potential upside of 4.54%. Given Encore Capital Group’s higher probable upside, equities analysts plainly believe Encore Capital Group is more favorable than EZCORP.

Insider & Institutional Ownership

99.8% of EZCORP shares are owned by institutional investors. 2.5% of Encore Capital Group shares are owned by company insiders. Comparatively, 2.1% of EZCORP shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

EZCORP beats Encore Capital Group on 9 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. In addition, the company engages in debt servicing and other portfolio management services to credit originator for non-performing loans. Further, it offers credit management services. Encore Capital Group, Inc. was incorporated in 1999 and is headquartered in San Diego, California.

About EZCORP

EZCORP, Inc. provides pawn services in the United States and Latin America. The company operates through three segments: U.S. Pawn, Latin America Pawn, and Other Investments. The company offers pawn loans collateralized by tangible personal property, jewelry, consumer electronics, tools, sporting goods, and musical instruments. It also retails merchandise, primarily collateral forfeited from pawn lending operations and pre-owned merchandise purchased from customers. In addition, the company provides EZ+, a web-based application that allow customers to manage their pawn transactions, layaways, and loyalty rewards online. Further, it operates under the EZPAWN, Value Pawn & Jewelry, Empeño Fácil, Cash Apoyo Efectivo, GuatePrenda, and MaxiEfectivo brands. EZCORP, Inc. was incorporated in 1989 and is headquartered in Austin, Texas.