Analyzing Credit Acceptance (CACC) and PROVIDENT Finl/S (FPLPY)

Credit Acceptance (NASDAQ: CACC) and PROVIDENT Finl/S (OTCMKTS:FPLPY) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, profitability, dividends and earnings.

Earnings & Valuation

This table compares Credit Acceptance and PROVIDENT Finl/S’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Credit Acceptance $1.11 billion 6.23 $470.20 million $20.44 17.53
PROVIDENT Finl/S $1.54 billion 0.83 -$173.21 million $0.81 10.68

Credit Acceptance has higher earnings, but lower revenue than PROVIDENT Finl/S. PROVIDENT Finl/S is trading at a lower price-to-earnings ratio than Credit Acceptance, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Credit Acceptance and PROVIDENT Finl/S’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Credit Acceptance 43.49% 29.44% 8.50%
PROVIDENT Finl/S N/A N/A N/A

Dividends

PROVIDENT Finl/S pays an annual dividend of $0.54 per share and has a dividend yield of 6.2%. Credit Acceptance does not pay a dividend. PROVIDENT Finl/S pays out 66.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

69.9% of Credit Acceptance shares are held by institutional investors. Comparatively, 0.0% of PROVIDENT Finl/S shares are held by institutional investors. 5.4% of Credit Acceptance shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Credit Acceptance has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, PROVIDENT Finl/S has a beta of -2.51, indicating that its stock price is 351% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Credit Acceptance and PROVIDENT Finl/S, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Credit Acceptance 4 3 1 0 1.63
PROVIDENT Finl/S 0 0 0 0 N/A

Credit Acceptance currently has a consensus target price of $276.71, suggesting a potential downside of 22.78%. Given Credit Acceptance’s higher possible upside, research analysts plainly believe Credit Acceptance is more favorable than PROVIDENT Finl/S.

Summary

Credit Acceptance beats PROVIDENT Finl/S on 13 of the 15 factors compared between the two stocks.

About Credit Acceptance

Credit Acceptance Corporation provides financing programs, and related products and services to independent and franchised automobile dealers in the United States. The company advances money to dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps various amounts collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. Credit Acceptance Corporation was founded in 1972 and is headquartered in Southfield, Michigan.

About PROVIDENT Finl/S

Provident Financial plc provides personal credit products to the non-standard lending market in the United Kingdom and the Republic of Ireland. The company offers credit cards; consumer credit, including unsecured and online instalment loans; and finance for cars and light commercial vehicles. It serves 2.5 million customers through its network of branches, call centers, and Websites. The company was founded in 1880 and is headquartered in Bradford, the United Kingdom.

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