Financial Analysis: Encore Capital Group (ECPG) versus Its Rivals

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Encore Capital Group (NASDAQ: ECPG) is one of 690 publicly-traded companies in the “Asset Management” 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 institutional ownership, analyst recommendations, profitability, risk, dividends, valuation and earnings.

Profitability

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 10.73% 21.39% 4.57%

Valuation and 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 6.46
Encore Capital Group Competitors $2.05 billion $426.24 million -10.65

Encore Capital Group’s competitors have higher revenue and earnings than Encore Capital Group. 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.

Analyst Recommendations

This is a breakdown of current recommendations for Encore Capital Group and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Encore Capital Group 0 1 5 0 2.83
Encore Capital Group Competitors 695 3387 3805 67 2.41

Encore Capital Group currently has a consensus target price of $38.50, indicating a potential upside of 19.75%. As a group, “Asset Management” companies have a potential upside of 36.16%. Given Encore Capital Group’s competitors higher possible upside, analysts plainly believe Encore Capital Group has less favorable growth aspects than its competitors.

Volatility and Risk

Encore Capital Group has a beta of 2.04, indicating that its share price is 104% more volatile than the S&P 500. Comparatively, Encore Capital Group’s competitors have a beta of 1.02, indicating that their average share price is 2% more volatile than the S&P 500.

Insider & Institutional Ownership

32.5% of shares of all “Asset Management” companies are owned by institutional investors. 1.8% of Encore Capital Group shares are owned by company insiders. Comparatively, 4.3% of shares of all “Asset Management” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Encore Capital Group competitors beat Encore Capital Group on 9 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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