Nicholas Financial (NICK) & Encore Capital Group (ECPG) Head-To-Head Analysis

Nicholas Financial (NASDAQ: NICK) and Encore Capital Group (NASDAQ:ECPG) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, valuation, institutional ownership, risk, earnings, dividends and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Nicholas Financial -3.23% 0.54% 0.19%
Encore Capital Group 6.68% 18.81% 2.49%

Volatility and Risk

Nicholas Financial has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Encore Capital Group has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Nicholas Financial and Encore Capital Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nicholas Financial 0 0 0 0 N/A
Encore Capital Group 0 2 3 0 2.60

Encore Capital Group has a consensus price target of $52.63, indicating a potential upside of 20.01%. Given Encore Capital Group’s higher possible upside, analysts plainly believe Encore Capital Group is more favorable than Nicholas Financial.

Valuation and Earnings

This table compares Nicholas Financial and Encore Capital Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nicholas Financial $90.47 million 0.77 $5.40 million N/A N/A
Encore Capital Group $1.19 billion 0.96 $83.22 million $4.01 10.94

Encore Capital Group has higher revenue and earnings than Nicholas Financial.

Institutional & Insider Ownership

55.4% of Nicholas Financial shares are held by institutional investors. 29.6% of Nicholas Financial shares are held by company insiders. Comparatively, 8.8% of Encore Capital Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Encore Capital Group beats Nicholas Financial on 9 of the 12 factors compared between the two stocks.

Nicholas Financial Company Profile

Nicholas Financial, Inc. operates as a specialized consumer finance company in the United States. The company engages in acquiring and servicing automobile finance installment contracts for the purchase of new and used automobiles and light trucks. It also originates direct consumer loans and sells consumer-finance related products. The company operates through 65 branch offices located in Alabama, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Maryland, Michigan, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Nicholas Financial, Inc. was founded in 1986 and is headquartered in Clearwater, Florida.

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.

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