Reviewing Winmark (WINA) & EZCORP (EZPW)

Winmark (NASDAQ: WINA) and EZCORP (NASDAQ:EZPW) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Institutional & Insider Ownership

49.3% of Winmark shares are held by institutional investors. Comparatively, 100.0% of EZCORP shares are held by institutional investors. 30.9% of Winmark shares are held by insiders. Comparatively, 2.1% of EZCORP shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Winmark and EZCORP, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Winmark 0 0 0 0 N/A
EZCORP 0 1 1 0 2.50

EZCORP has a consensus target price of $16.00, indicating a potential upside of 29.03%. Given EZCORP’s higher possible upside, analysts plainly believe EZCORP is more favorable than Winmark.

Risk & Volatility

Winmark has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, EZCORP has a beta of 1.61, meaning that its share price is 61% more volatile than the S&P 500.

Earnings and Valuation

This table compares Winmark and EZCORP’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Winmark $69.75 million 7.66 $24.56 million N/A N/A
EZCORP $747.95 million 0.90 $31.85 million $0.62 20.00

EZCORP has higher revenue and earnings than Winmark.

Profitability

This table compares Winmark and EZCORP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Winmark 37.15% -104.66% 51.72%
EZCORP 5.33% 6.81% 4.38%

Dividends

Winmark pays an annual dividend of $0.60 per share and has a dividend yield of 0.4%. EZCORP does not pay a dividend.

Summary

EZCORP beats Winmark on 7 of the 13 factors compared between the two stocks.

About Winmark

Winmark Corporation operates as a franchisor of 5 retail store concepts that buy, sell, trade, and consign merchandise primarily in the United States and Canada. The company operates through two segments, Franchising and Leasing. Its franchises retail stores operate under the Plato's Closet, Once Upon A Child, Play It Again Sports, Music Go Round, and Style Encore brand names. The company's Plato's Closet brand stores buy and sell used clothing and accessories for the teenage and young adult market; and Once Upon A Child brand stores buy and sell used and new children's clothing, toys, furniture, equipment, and accessories primarily targeting parents of children ages infant to 12 years. Its Play It Again Sports brand stores buy, sell, trade, and consign used and new sporting goods, equipment, and accessories for various athletic activities, such as team sports, fitness, ski/snowboard, golf, and others; Music Go Round brand stores buy, sell, trade, and consign used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories; and Style Encore brand stores buy and sell used women's apparel, shoes, and accessories. In addition, the company is also involved in middle-market equipment leasing business focusing on technology-based assets for large and medium-sized businesses; and small-ticket financing business. As of December 30, 2017, it had 1,211 franchised stores. Winmark Corporation was founded in 1988 and is headquartered in Minneapolis, Minnesota.

About EZCORP

EZCORP, Inc. provides pawn loans. The company operates through three segments: U.S. Pawn, Mexico Pawn, and Other International. It offers pawn loans, which are non-recourse loans collateralized by tangible personal property, such as jewelry, consumer electronics, power tools, sporting goods, and musical instruments; and sells merchandise, including collateral forfeited from pawn lending operations and used merchandise purchased from customers. The company also offers payday loan services through its financial services stores. As of October 6, 2017, it operated a network of 513 pawn stores in the United States under the EZPAWN or Value Pawn & Jewelry names; and 358 pawn stores in Latin America, which includes Mexico, Guatemala, El Salvador, Honduras, and Peru under the Empeño Fácil, GuatePrenda, and MaxiEfectivo names. The company also operates a network of 27 financial services stores under the CASHMAX name in Canada. EZCORP, Inc. was founded in 1989 and is headquartered in Austin, Texas.

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