Financial Review: Encore Capital Group (ECPG) and Its Peers

Encore Capital Group (NASDAQ: ECPG) is one of 6 public companies in the “Short-term business credit” industry, but how does it weigh in compared to its peers? We will compare Encore Capital Group to related companies based on the strength of its institutional ownership, risk, earnings, valuation, profitability, dividends and analyst recommendations.

Institutional and Insider Ownership

19.5% of shares of all “Short-term business credit” companies are held by institutional investors. 1.8% of Encore Capital Group shares are held by company insiders. Comparatively, 26.9% of shares of all “Short-term business credit” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Encore Capital Group has a beta of 2.04, meaning that its stock price is 104% more volatile than the S&P 500. Comparatively, Encore Capital Group’s peers have a beta of 1.17, meaning that their average stock price is 17% more volatile than the S&P 500.

Profitability

This table compares Encore Capital Group and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Encore Capital Group 8.51% 20.21% 3.07%
Encore Capital Group Competitors 8.27% -98.50% -12.37%

Valuation and Earnings

This table compares Encore Capital Group and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Encore Capital Group $1.36 billion $115.89 million 5.70
Encore Capital Group Competitors $294.58 million $15.78 million 0.34

Encore Capital Group has higher revenue and earnings than its peers. Encore Capital Group is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of current recommendations and price targets for Encore Capital Group and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Encore Capital Group 0 1 5 0 2.83
Encore Capital Group Competitors 30 65 70 5 2.29

Encore Capital Group presently has a consensus target price of $38.50, indicating a potential upside of 35.61%. As a group, “Short-term business credit” companies have a potential upside of 27.55%. Given Encore Capital Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe Encore Capital Group is more favorable than its peers.

Summary

Encore Capital Group beats its peers on 10 of the 13 factors compared.

About Encore Capital Group

Encore Capital Group, Inc., a specialty finance company, together with its subsidiaries, provides debt recovery solutions and other related services for consumers across a range of financial assets worldwide. The company purchases portfolios of defaulted consumer receivables at deep discounts to face value, as well as manages them by working with individuals as they repay their obligations and works toward financial recovery. It is also involved in the early stage collections, business process outsourcing, contingent collections, and trace services and litigation activities; and the management of non-performing loans, as well as provides portfolio management services to banks for non-performing loans. Encore Capital Group, Inc. was founded in 1998 and is headquartered in San Diego, California.

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