Critical Survey: PRA Group (NASDAQ:PRAA) and Palmer Square Capital BDC (NYSE:PSBD)

PRA Group (NASDAQ:PRAA) and Palmer Square Capital BDC (NYSE:PSBD) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Profitability

This table compares PRA Group and Palmer Square Capital BDC’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PRA Group	-10.40%	-6.82%	-1.88%
Palmer Square Capital BDC	96.09%	23.31%	9.23%

Valuation and Earnings

This table compares PRA Group and Palmer Square Capital BDC’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PRA Group	$802.55 million	1.21	-$83.48 million	($2.13)	-11.62
Palmer Square Capital BDC	$112.22 million	4.88	$107.84 million	N/A	N/A

Palmer Square Capital BDC has lower revenue, but higher earnings than PRA Group.

Insider and Institutional Ownership

97.2% of PRA Group shares are held by institutional investors. Comparatively, 6.5% of Palmer Square Capital BDC shares are held by institutional investors. 2.0% of PRA Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for PRA Group and Palmer Square Capital BDC, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PRA Group	0	0	1	0	3.00
Palmer Square Capital BDC	0	3	4	0	2.57

PRA Group currently has a consensus price target of $36.00, suggesting a potential upside of 45.87%. Palmer Square Capital BDC has a consensus price target of $16.93, suggesting a potential upside of 0.65%. Given PRA Group’s stronger consensus rating and higher possible upside, equities analysts plainly believe PRA Group is more favorable than Palmer Square Capital BDC.

Summary

Palmer Square Capital BDC beats PRA Group on 6 of the 11 factors compared between the two stocks.

About PRA Group

PRA Group, Inc., a financial and business services company, engages in the purchase, collection, and management of portfolios of nonperforming loans worldwide. It is involved in the purchase of accounts that are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail, and auto finance companies. The company also acquires nonperforming loans, including Visa and MasterCard credit card accounts, private label and other credit card accounts, personal loans, automobile loans, and small business loans from banks, credit unions, consumer finance companies, retailers, utilities, automobile finance companies, and other credit originators. In addition, it provides fee-based services on class action claims recoveries. The company was formerly known as Portfolio Recovery Associates, Inc. and changed its name to PRA Group, Inc. in October 2014. PRA Group, Inc. was founded in 1996 and is headquartered in Norfolk, Virginia.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.