Consumer Portfolio Services (NASDAQ: CPSS) and CPI Card Group (NASDAQ:PMTS) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Institutional & Insider Ownership

48.1% of Consumer Portfolio Services shares are owned by institutional investors. Comparatively, 21.9% of CPI Card Group shares are owned by institutional investors. 37.5% of Consumer Portfolio Services shares are owned by insiders. Comparatively, 4.6% of CPI Card Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Consumer Portfolio Services has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500. Comparatively, CPI Card Group has a beta of -0.13, suggesting that its stock price is 113% less volatile than the S&P 500.

Dividends

CPI Card Group pays an annual dividend of $0.18 per share and has a dividend yield of 17.1%. Consumer Portfolio Services does not pay a dividend. CPI Card Group pays out -150.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Consumer Portfolio Services and CPI Card Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Consumer Portfolio Services 0 1 1 0 2.50
CPI Card Group 2 4 1 0 1.86

Consumer Portfolio Services currently has a consensus price target of $6.00, suggesting a potential upside of 50.00%. CPI Card Group has a consensus price target of $4.90, suggesting a potential upside of 366.67%. Given CPI Card Group’s higher possible upside, analysts plainly believe CPI Card Group is more favorable than Consumer Portfolio Services.

Valuation & Earnings

This table compares Consumer Portfolio Services and CPI Card Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Consumer Portfolio Services $159.50 million 0.57 $19.32 million $0.85 4.71
CPI Card Group $270.44 million 0.22 $32.41 million ($0.12) -8.75

CPI Card Group has higher revenue and earnings than Consumer Portfolio Services. CPI Card Group is trading at a lower price-to-earnings ratio than Consumer Portfolio Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Consumer Portfolio Services and CPI Card Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Consumer Portfolio Services 5.49% 12.76% 0.99%
CPI Card Group -2.46% -1.51% 0.56%

Summary

Consumer Portfolio Services beats CPI Card Group on 9 of the 14 factors compared between the two stocks.

Consumer Portfolio Services Company Profile

Consumer Portfolio Services, Inc. is a specialty finance company. The Company’s business is to purchase and service retail automobile contracts originated primarily by franchised automobile dealers and by select independent dealers in the United States in the sale of new and used automobiles, light trucks and passenger vans. Through its automobile contract purchases, the Company provides indirect financing to the customers of dealers having limited credit histories, low incomes or past credit problems, who it refers to as sub-prime customers. It serves as an alternative source of financing for dealers, facilitating sales to customers. The Company offers approximately eight financing programs to its dealership customers and prices each program according to the relative credit risk. Its financing programs are Bravo, First Time Buyer, Mercury/Delta, Standard, Alpha, Alpha Plus, Super Alpha and Preferred.

CPI Card Group Company Profile

CPI Card Group Inc., formerly CPI Holdings I, Inc., provides Financial Payment Card solutions in North America. The Company is engaged in the design, production, data personalization, packaging and fulfillment of Financial Payment Cards, which it defines as credit cards, debit cards and prepaid debit cards issued on the networks of the Payment Card Brands in the United States, Europe and Canada. It is also engaged in the design, production, data personalization, packaging and fulfillment of retail gift and loyalty cards. Its segments include U.S. Debit and Credit, which produces Financial Payment Cards and provides integrated card services to card-issuing banks in the United States; U.S. Prepaid Debit, which provides integrated card services to Prepaid Debit Card issuers in the United States; U.K. Limited, which produces retail cards for customers in the United Kingdom and continental Europe, and Other, which has operations in Ontario, Canada and Petersfield, United Kingdom.

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