Critical Review: Encore Capital Group (ECPG) & Its Peers
Encore Capital Group (NASDAQ: ECPG) is one of 6 publicly-traded companies in the “Short-term business credit” industry, but how does it weigh in compared to its competitors? We will compare Encore Capital Group to similar businesses based on the strength of its analyst recommendations, institutional ownership, valuation, dividends, earnings, profitability and risk.
Volatility and Risk
Encore Capital Group has a beta of 2.04, suggesting that its share price is 104% more volatile than the S&P 500. Comparatively, Encore Capital Group’s competitors have a beta of 1.17, suggesting that their average share price is 17% more volatile than the S&P 500.
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 endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a summary of current ratings and target prices for Encore Capital Group and its competitors, 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 currently has a consensus target price of $38.50, suggesting a potential upside of 31.22%. As a group, “Short-term business credit” companies have a potential upside of 30.21%. Given Encore Capital Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe Encore Capital Group is more favorable than its competitors.
Valuation & Earnings
This table compares Encore Capital Group and its competitors gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|Encore Capital Group||$1.36 billion||$115.89 million||5.89|
|Encore Capital Group Competitors||$294.58 million||$15.78 million||0.48|
Encore Capital Group has higher revenue and earnings than its competitors. Encore Capital Group is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.
This table compares Encore Capital Group and its competitors’ 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%||-98.36%||-12.36%|
Encore Capital Group beats its competitors on 10 of the 13 factors compared.
Encore Capital Group Company Profile
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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