Pra Group (PRAA) and G&K Services (GK) Financial Comparison

Pra Group (NASDAQ: PRAA) and G&K Services (NASDAQ:GK) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Pra Group and G&K Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pra Group 2 2 0 0 1.50
G&K Services 0 0 0 0 N/A

Pra Group presently has a consensus target price of $40.00, suggesting a potential upside of 20.30%.

Dividends

G&K Services pays an annual dividend of $1.56 per share. Pra Group does not pay a dividend. G&K Services pays out 54.7% of its earnings in the form of a dividend.

Institutional and Insider Ownership

88.6% of G&K Services shares are held by institutional investors. 2.1% of Pra Group shares are held by company insiders. Comparatively, 3.7% of G&K Services 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.

Valuation and Earnings

This table compares Pra Group and G&K Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pra Group $830.58 million 1.81 $85.09 million $1.24 26.81
G&K Services N/A N/A N/A $2.85 N/A

Pra Group has higher revenue and earnings than G&K Services. G&K Services is trading at a lower price-to-earnings ratio than Pra Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Pra Group and G&K Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pra Group 7.57% 2.98% 0.90%
G&K Services 3.79% 9.12% 4.03%

Summary

G&K Services beats Pra Group on 6 of the 9 factors compared between the two stocks.

Pra Group Company Profile

PRA Group, Inc. (PRA Group) is a financial and business services company with operations in the Americas and Europe. The Company’s primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company operates through the account receivables management segment. It also provides fee-based services, such as vehicle location, skip tracing and collateral recovery for auto lenders, government entities and law enforcement; revenue administration, audit and revenue discovery/recovery services for local government entities; class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the United States, and contingent collections of nonperforming loans in Europe and South America. The Company’s portfolio of nonperforming loans includes a set of accounts that can be categorized by asset type, age and size of account, level of previous collection efforts, payment history, and geography.

G&K Services Company Profile

G&K Services, Inc. is a service-focused provider of branded uniform and facility services programs. The Company provides a range of workwear and protective safety apparel through rental and direct purchase programs. The Company also supplies various facility products and services, including floor mats, towels, mops, restroom hygiene products, and first aid supplies. It also manufactures certain work apparel garments that are used to support its garment rental and direct purchase programs. It operates in two segments: United States (includes the Dominican Republic) and Canada. The Company operated from approximately 160 locations, as of July 2, 2016. The Company serves a diverse base of customer locations in various industries, including automotive, warehousing, distribution, transportation, energy, manufacturing, food processing, retail, restaurants, construction and trades, hospitality, government, healthcare and others.

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