Manhattan Bridge Capital (NASDAQ:LOAN – Get Free Report) and Encore Capital Group (NASDAQ:ECPG – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.
Volatility and Risk
Manhattan Bridge Capital has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500. Comparatively, Encore Capital Group has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.
Institutional and Insider Ownership
21.8% of Manhattan Bridge Capital shares are held by institutional investors. 24.5% of Manhattan Bridge Capital shares are held by company insiders. Comparatively, 2.5% of Encore Capital Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Manhattan Bridge Capital | $9.69 million | 6.89 | $5.59 million | $0.47 | 12.41 |
| Encore Capital Group | $1.32 billion | 0.73 | -$139.24 million | ($4.89) | -8.42 |
Manhattan Bridge Capital has higher earnings, but lower revenue than Encore Capital Group. Encore Capital Group is trading at a lower price-to-earnings ratio than Manhattan Bridge Capital, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Manhattan Bridge Capital and Encore Capital Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Manhattan Bridge Capital | 58.44% | 12.68% | 8.03% |
| Encore Capital Group | -8.38% | 16.18% | 2.99% |
Analyst Recommendations
This is a summary of current recommendations and price targets for Manhattan Bridge Capital and Encore Capital Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Manhattan Bridge Capital | 0 | 0 | 0 | 0 | 0.00 |
| Encore Capital Group | 0 | 0 | 3 | 1 | 3.25 |
Encore Capital Group has a consensus price target of $62.67, suggesting a potential upside of 52.21%. Given Encore Capital Group’s stronger consensus rating and higher possible upside, analysts plainly believe Encore Capital Group is more favorable than Manhattan Bridge Capital.
Summary
Manhattan Bridge Capital beats Encore Capital Group on 8 of the 15 factors compared between the two stocks.
About Manhattan Bridge Capital
Manhattan Bridge Capital, Inc., a real estate finance company, originates, services, and manages a portfolio of first mortgage loans in the United States. The company offers short-term, secured, and non-banking loans to real estate investors to fund acquisition, renovation, rehabilitation, or development of residential or commercial properties. Its loans are secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was founded in 1989 and is headquartered in Great Neck, New York.
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.
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