Encore Capital Group (NASDAQ:ECPG – Get Free Report) and Open Lending (NASDAQ:LPRO – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.
Institutional and Insider Ownership
78.1% of Open Lending shares are held by institutional investors. 2.5% of Encore Capital Group shares are held by insiders. Comparatively, 13.2% of Open Lending shares are held 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.
Analyst Ratings
This is a summary of recent recommendations and price targets for Encore Capital Group and Open Lending, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Encore Capital Group | 1 | 0 | 3 | 2 | 3.00 |
| Open Lending | 1 | 3 | 3 | 0 | 2.29 |
Risk and Volatility
Encore Capital Group has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, Open Lending has a beta of 1.94, meaning that its stock price is 94% more volatile than the S&P 500.
Valuation and Earnings
This table compares Encore Capital Group and Open Lending”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Encore Capital Group | $1.32 billion | 0.77 | -$139.24 million | ($3.74) | -11.78 |
| Open Lending | $24.02 million | 9.45 | -$135.01 million | ($1.18) | -1.63 |
Open Lending has lower revenue, but higher earnings than Encore Capital Group. Encore Capital Group is trading at a lower price-to-earnings ratio than Open Lending, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Encore Capital Group and Open Lending’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Encore Capital Group | -6.07% | 19.61% | 3.47% |
| Open Lending | N/A | -48.33% | -17.09% |
Summary
Open Lending beats Encore Capital Group on 9 of the 14 factors compared between the two stocks.
About Encore Capital Group
Encore Capital Group, Inc., a specialty finance company, provides debt recovery solutions and other related services for consumers across 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 provision of early stage collection, business process outsourcing, and contingent collection services. In addition, the company engages in debt servicing and other portfolio management services to credit originator for non-performing loans. Further, it offers credit management services. Encore Capital Group, Inc. was incorporated in 1999 and is headquartered in San Diego, California.
About Open Lending
Open Lending Corporation provides lending enablement and risk analytics solutions to credit unions, regional banks, finance companies, and captive finance companies of automakers in the United States. The company offers Lenders Protection Program (LPP), which is a cloud-based automotive lending platform that provides loan analytics solutions and automated issuance of credit default insurance with third-party insurance providers. Its LPP products include loan analytics, risk-based loan pricing, risk modeling, and automated decision technology for automotive lenders. Open Lending Corporation was founded in 2000 and is based in Austin, Texas.
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