Critical Survey: Atlanticus (NASDAQ:ATLC) vs. Emergent Capital (OTCMKTS:EMGCQ)

Emergent Capital (OTCMKTS:EMGCQ) and Atlanticus (NASDAQ:ATLC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Emergent Capital and Atlanticus, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Emergent Capital	0	0	0	0	0.00
Atlanticus	0	2	4	0	2.67

Atlanticus has a consensus price target of $88.75, suggesting a potential upside of 64.41%. Given Atlanticus’ stronger consensus rating and higher probable upside, analysts clearly believe Atlanticus is more favorable than Emergent Capital.

Valuation & Earnings

This table compares Emergent Capital and Atlanticus”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Emergent Capital	N/A	N/A	N/A	N/A	N/A
Atlanticus	$1.31 billion	0.62	$111.30 million	$5.63	9.59

Atlanticus has higher revenue and earnings than Emergent Capital.

Profitability

This table compares Emergent Capital and Atlanticus’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Emergent Capital	N/A	N/A	N/A
Atlanticus	7.46%	22.86%	2.86%

Institutional & Insider Ownership

14.2% of Atlanticus shares are held by institutional investors. 48.9% of Emergent Capital shares are held by insiders. Comparatively, 51.8% of Atlanticus shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Atlanticus beats Emergent Capital on 9 of the 9 factors compared between the two stocks.

About Emergent Capital

Emergent Capital, Inc., a specialty finance company, invests in life settlements. As of August 31, 2020, it owned a portfolio of 500 life insurance policies. The company was formerly known as Imperial Holdings, Inc. and changed its name to Emergent Capital, Inc. in September 2015. The company was founded in 2006 and is based in Boca Raton, Florida. On October 15, 2020, Emergent Capital, Inc., along with its affiliate, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.

About Atlanticus

Atlanticus Holdings Corporation, a financial technology company, provides credit and related financial services and products to customers the United States. It operates in two segments, Credit as a Service, and Auto Finance. The Credit as a Service segment originates a range of consumer loan products, such as private label and general purpose credit cards originated by lenders through various channels, including retail and healthcare, direct mail solicitation, digital marketing, and partnerships with third parties; and offers credit to their customers for the purchase of various goods and services, including consumer electronics, furniture, elective medical procedures, healthcare, and home-improvements by partnering with retailers, healthcare providers, and other service providers. This segment also offers loan servicing, such as risk management and customer service outsourcing for third parties; and engages in testing and investment activities in consumer finance technology platforms. The Auto Finance segment purchases and/or services loans secured by automobiles from or for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, and used car business. This segment also provides floor plan financing and installment lending products. It also invests in and services portfolios of credit card receivables. The company was founded in 1996 and is headquartered in Atlanta, Georgia.