PHH Corp (NYSE: PHH) and World Acceptance Corporation (NASDAQ:WRLD) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for PHH Corp and World Acceptance Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PHH Corp 0 1 1 0 2.50
World Acceptance Corporation 3 0 0 0 1.00

PHH Corp presently has a consensus target price of $16.25, indicating a potential upside of 14.52%. World Acceptance Corporation has a consensus target price of $52.33, indicating a potential downside of 27.79%. Given PHH Corp’s stronger consensus rating and higher probable upside, analysts clearly believe PHH Corp is more favorable than World Acceptance Corporation.

Risk & Volatility

PHH Corp has a beta of 1.94, suggesting that its stock price is 94% more volatile than the S&P 500. Comparatively, World Acceptance Corporation has a beta of 2.34, suggesting that its stock price is 134% more volatile than the S&P 500.

Insider & Institutional Ownership

97.0% of PHH Corp shares are held by institutional investors. Comparatively, 96.9% of World Acceptance Corporation shares are held by institutional investors. 2.5% of PHH Corp shares are held by insiders. Comparatively, 27.3% of World Acceptance Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares PHH Corp and World Acceptance Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PHH Corp -55.15% -20.67% -7.37%
World Acceptance Corporation 13.13% 15.75% 8.48%

Earnings & Valuation

This table compares PHH Corp and World Acceptance Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PHH Corp $734.00 million 0.99 -$261.67 million ($5.10) -2.78
World Acceptance Corporation $533.56 million 1.18 $136.07 million $7.98 9.08

World Acceptance Corporation has higher revenue, but lower earnings than PHH Corp. PHH Corp is trading at a lower price-to-earnings ratio than World Acceptance Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

World Acceptance Corporation beats PHH Corp on 8 of the 13 factors compared between the two stocks.

About PHH Corp

PHH Corporation is a standalone mortgage company. The Company provides outsourced mortgage banking services to a range of clients, including financial institutions and real estate brokers throughout the United States, and is focused on originating, selling, servicing and subservicing residential mortgage loans through its subsidiary, PHH Mortgage Corporation and its subsidiaries. It operates through two segments: Mortgage Production and Mortgage Servicing. The Mortgage Production segment provides mortgage loan origination services and sells mortgage loans. The Mortgage Servicing segment performs servicing activities for loans originated by the Company and mortgage servicing rights purchased from others, and acts as a subservicer for certain clients that own the underlying mortgage servicing rights. The Mortgage Production segment provides private label mortgage services to financial institutions and real estate brokers, and sources mortgage loans through its retail platform.

About World Acceptance Corporation

World Acceptance Corporation operates a small-loan consumer finance business in 15 states and Mexico as of March 31, 2016. The Company offers short-term small installment loans, medium-term larger installment loans, related credit insurance and ancillary products and services to individuals. The Company offers standardized installment loans generally between $300 and $4,000 through 1,339 branches in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Texas, Tennessee, Wisconsin and Mexico as of March 31, 2016. The Company generally serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses and credit card lenders. In the United States branches, the Company also offers income tax return preparation services to its loan customers and other individuals.

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