Credit Acceptance Corporation (NASDAQ: CACC) and Orix Corp Ads (NYSE:IX) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.
This is a breakdown of current recommendations and price targets for Credit Acceptance Corporation and Orix Corp Ads, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Credit Acceptance Corporation||4||5||0||0||1.56|
|Orix Corp Ads||0||0||0||1||4.00|
Credit Acceptance Corporation currently has a consensus target price of $204.88, suggesting a potential downside of 25.04%. Given Credit Acceptance Corporation’s higher probable upside, research analysts clearly believe Credit Acceptance Corporation is more favorable than Orix Corp Ads.
Volatility and Risk
Credit Acceptance Corporation has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500. Comparatively, Orix Corp Ads has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500.
Orix Corp Ads pays an annual dividend of $2.10 per share and has a dividend yield of 2.6%. Credit Acceptance Corporation does not pay a dividend. Orix Corp Ads pays out 218.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Credit Acceptance Corporation and Orix Corp Ads’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Credit Acceptance Corporation||35.13%||32.24%||8.71%|
|Orix Corp Ads||9.95%||10.88%||2.55%|
Institutional and Insider Ownership
72.5% of Credit Acceptance Corporation shares are held by institutional investors. Comparatively, 2.0% of Orix Corp Ads shares are held by institutional investors. 5.8% of Credit Acceptance Corporation shares are held by company insiders. Comparatively, 0.1% of Orix Corp Ads shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Credit Acceptance Corporation and Orix Corp Ads’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Credit Acceptance Corporation||$840.30 million||6.33||$357.05 million||$18.35||14.89|
|Orix Corp Ads||$26.10 billion||0.83||$6.19 billion||$0.96||84.93|
Orix Corp Ads has higher revenue and earnings than Credit Acceptance Corporation. Credit Acceptance Corporation is trading at a lower price-to-earnings ratio than Orix Corp Ads, indicating that it is currently the more affordable of the two stocks.
Credit Acceptance Corporation beats Orix Corp Ads on 10 of the 16 factors compared between the two stocks.
Credit Acceptance Corporation Company Profile
Credit Acceptance Corporation offers financing programs that enable automobile dealers to sell vehicles to consumers. The Company’s financing programs are offered through a network of automobile dealers. The Company has two Dealers financing programs: the Portfolio Program and the Purchase Program. Under the Portfolio Program, the Company advances money to dealers (Dealer Loan) in exchange for the right to service the underlying consumer loans. Under the Purchase Program, the Company buys the consumer loans from the dealers (Purchased Loan) and keeps the amounts collected from the consumer. Dealer Loans and Purchased Loans are collectively referred to as Loans. As of December 31, 2016, the Company’s target market included approximately 60,000 independent and franchised automobile dealers in the United States. The Company has market area managers located throughout the United States that market its programs to dealers, enroll new dealers and support active dealers.
Orix Corp Ads Company Profile
ORIX Corporation (ORIX) is a financial services company. The Company operates through six segments: Corporate Financial Services, which consists of lending, leasing and fee business; Maintenance Leasing, which consists of automobile leasing and rentals, car sharing, and test and measurement instruments and information technology-related equipment rentals and leasing; Real Estate, which consists of real estate development and rental, facility operation, real estate investment trust (REIT) asset management, and real estate investment advisory services; Investment and Operation, which consists of environment and energy-related business, principal investment and loan servicing (asset recovery); Retail Segment, which consists of life insurance, banking and card loan business, and Overseas Business, which consists of leasing, lending, investment in bonds, investment banking, asset management and ship- and aircraft-related operations.
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