PRA Group (NASDAQ:PRAA) vs. Grenke (OTCMKTS:GKSGF) Critical Contrast

PRA Group (NASDAQ:PRAA) and Grenke (OTCMKTS:GKSGF) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Valuation & Earnings

This table compares PRA Group and Grenke”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PRA Group	$1.20 billion	0.61	-$305.14 million	($6.73)	-2.89
Grenke	N/A	N/A	N/A	$4.09	4.22

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

Analyst Recommendations

This is a summary of current ratings and target prices for PRA Group and Grenke, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PRA Group	1	2	1	1	2.40
Grenke	0	0	1	0	3.00

PRA Group presently has a consensus target price of $26.00, suggesting a potential upside of 33.54%. Given PRA Group’s higher probable upside, equities analysts clearly believe PRA Group is more favorable than Grenke.

Profitability

This table compares PRA Group and Grenke’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PRA Group	-19.91%	15.56%	3.18%
Grenke	N/A	N/A	N/A

Institutional and Insider Ownership

97.2% of PRA Group shares are owned by institutional investors. Comparatively, 28.5% of Grenke shares are owned by institutional investors. 2.2% 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 stock is poised for long-term growth.

Summary

PRA Group beats Grenke on 7 of the 11 factors compared between the two stocks.

About PRA Group

PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. 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 card accounts, private label and other credit card accounts, personal loans, automobile loans, and small business loans 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. 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 founded in 1996 and is headquartered in Norfolk, Virginia.

About Grenke

Grenke AG, together with its subsidiaries, provides financial services to small and medium-sized (SME) enterprises in Germany, France, Italy, and internationally. It operates through three segments: Leasing, Banking, and Factoring. The company is involved in the leasing activities, such as financing to commercial lessees, rental, service, protection, and maintenance offerings, as well as sale of used equipment; and small-ticket leasing of IT products, such as PCs, notebooks, servers, monitors, software, and other peripheral equipment; leasing office communication products, that includes telecommunication and copier equipment, as well as medical technology products, small machinery and systems, and security devices; and leasing green economy objects, such as wallboxes, photovoltaic systems, and eBikes. It also provides banking products and services, such as fixed deposits to private and business customers through its website; financing services to business start-ups, as well as development loans to SMEs and self-employed professionals; and small-ticket factoring services. The company was formerly known as GrenkeLeasing AG and changed its name to Grenke AG in May 2016. Grenke AG was founded in 1978 and is headquartered in Baden-Baden, Germany.