EZCORP (NASDAQ:EZPW – Get Free Report) and Encore Capital Group (NASDAQ:ECPG – Get Free Report) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.
Risk and Volatility
EZCORP has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Encore Capital Group has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.
Insider and Institutional Ownership
99.8% of EZCORP shares are held by institutional investors. 2.1% of EZCORP shares are held by company insiders. Comparatively, 2.5% 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 stock is poised for long-term growth.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| EZCORP | $1.27 billion | 0.92 | $109.61 million | $1.41 | 13.63 |
| Encore Capital Group | $1.32 billion | 0.92 | -$139.24 million | ($1.83) | -29.79 |
EZCORP has higher earnings, but lower revenue 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.
Analyst Recommendations
This is a summary of recent ratings and target prices for EZCORP and Encore Capital Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| EZCORP | 0 | 2 | 5 | 1 | 2.88 |
| Encore Capital Group | 1 | 0 | 3 | 1 | 2.80 |
EZCORP presently has a consensus price target of $20.50, suggesting a potential upside of 6.66%. Encore Capital Group has a consensus price target of $61.67, suggesting a potential upside of 13.11%. Given Encore Capital Group’s higher possible upside, analysts clearly believe Encore Capital Group is more favorable than EZCORP.
Profitability
This table compares EZCORP and Encore Capital Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| EZCORP | 8.60% | 12.00% | 6.18% |
| Encore Capital Group | -2.89% | 25.27% | 4.30% |
Summary
EZCORP beats Encore Capital Group on 8 of the 14 factors compared between the two stocks.
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.
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.
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