Encore Capital Group (NASDAQ:ECPG – Get Free Report) and Katapult (NASDAQ:KPLT – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.
Volatility and Risk
Encore Capital Group has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Katapult has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500.
Profitability
This table compares Encore Capital Group and Katapult’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Encore Capital Group | 15.86% | 29.83% | 5.58% |
| Katapult | 3.60% | -26.41% | 10.86% |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Encore Capital Group | $1.77 billion | 1.14 | $256.83 million | $13.21 | 7.22 |
| Katapult | $291.76 million | 0.09 | $1.37 million | $1.37 | 3.97 |
Encore Capital Group has higher revenue and earnings than Katapult. Katapult is trading at a lower price-to-earnings ratio than Encore Capital Group, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings for Encore Capital Group and Katapult, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Encore Capital Group | 0 | 0 | 5 | 1 | 3.17 |
| Katapult | 1 | 0 | 0 | 0 | 1.00 |
Encore Capital Group currently has a consensus target price of $89.75, suggesting a potential downside of 5.94%. Given Encore Capital Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Encore Capital Group is more favorable than Katapult.
Insider & Institutional Ownership
26.8% of Katapult shares are owned by institutional investors. 3.0% of Encore Capital Group shares are owned by insiders. Comparatively, 8.0% of Katapult shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
Encore Capital Group beats Katapult on 11 of the 15 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 Katapult
Katapult Holdings, Inc., an e-commerce focused financial technology company, provides e-commerce point-of-sale lease-purchase options for nonprime consumers in the United States. The company's technology platform provides nonprime consumers with a lease purchase option to enable them to obtain durable goods from its network of e-commerce retailers. It also offers Katapult Pay, a one-time use virtual card technology that makes lease purchasing and transactions. The company was formerly known as Cognical Holdings, Inc. and changed its name to Katapult Holdings, Inc. in February 2020. The company is headquartered in Plano, Texas.
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