Contrasting Atlanticus (ATLC) and Credit Acceptance (CACC)

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

Insider and Institutional Ownership

14.9% of Atlanticus shares are held by institutional investors. Comparatively, 62.1% of Credit Acceptance shares are held by institutional investors. 34.3% of Atlanticus shares are held by company insiders. Comparatively, 5.4% of Credit Acceptance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Atlanticus and Credit Acceptance, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlanticus 0 0 0 0 N/A
Credit Acceptance 3 3 1 0 1.71

Credit Acceptance has a consensus price target of $344.33, indicating a potential downside of 9.94%. Given Credit Acceptance’s higher probable upside, analysts clearly believe Credit Acceptance is more favorable than Atlanticus.

Risk & Volatility

Atlanticus has a beta of 0.07, suggesting that its stock price is 93% less volatile than the S&P 500. Comparatively, Credit Acceptance has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Profitability

This table compares Atlanticus and Credit Acceptance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlanticus -21.62% N/A -7.51%
Credit Acceptance 48.70% 28.83% 8.87%

Earnings and Valuation

This table compares Atlanticus and Credit Acceptance’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlanticus $121.14 million 0.41 -$40.78 million N/A N/A
Credit Acceptance $1.11 billion 6.65 $470.20 million $20.44 18.71

Credit Acceptance has higher revenue and earnings than Atlanticus.

Summary

Credit Acceptance beats Atlanticus on 10 of the 11 factors compared between the two stocks.

About Atlanticus

Atlanticus Holdings Corporation provides credit and related financial services and products to financially underserved consumer credit market in the United States. It operates in two segments, Credit and Other Investments, and Auto Finance. The Credit and Other Investments segment originates a range of consumer loan products, such as retail credit, personal loans, and credit cards through various channels, including retail point-of-sale, direct mail solicitation, Internet-based marketing, and partnerships with third parties; and offers point-of-sale financing by partnering with retailers and service providers to provide credit to their customers for the purchase of various goods and services. This segment also invests in and services portfolios of credit card receivables. In addition, this segment 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. The company was formerly known as CompuCredit Holdings Corporation and changed its name to Atlanticus Holdings Corporation in November 2012. Atlanticus Holdings Corporation was founded in 1996 and is headquartered in Atlanta, Georgia.

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.

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