FirstCash (NASDAQ:FCFS – Get Free Report) and Encore Capital Group (NASDAQ:ECPG – Get Free Report) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.
Risk and Volatility
FirstCash has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Encore Capital Group has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.
Valuation & Earnings
This table compares FirstCash and Encore Capital Group”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| FirstCash | $4.12 billion | 2.37 | $330.38 million | $8.76 | 25.73 |
| Encore Capital Group | $1.77 billion | 1.19 | $256.83 million | $13.21 | 7.48 |
FirstCash has higher revenue and earnings than Encore Capital Group. Encore Capital Group is trading at a lower price-to-earnings ratio than FirstCash, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares FirstCash and Encore Capital Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| FirstCash | 9.42% | 19.65% | 8.38% |
| Encore Capital Group | 15.86% | 29.83% | 5.58% |
Insider and Institutional Ownership
80.3% of FirstCash shares are owned by institutional investors. 2.9% of FirstCash shares are owned by company insiders. Comparatively, 3.0% of Encore Capital Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a summary of recent ratings for FirstCash and Encore Capital Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| FirstCash | 0 | 1 | 4 | 0 | 2.80 |
| Encore Capital Group | 0 | 0 | 5 | 1 | 3.17 |
FirstCash currently has a consensus target price of $249.00, suggesting a potential upside of 10.46%. Encore Capital Group has a consensus target price of $89.75, suggesting a potential downside of 9.22%. Given FirstCash’s higher possible upside, analysts plainly believe FirstCash is more favorable than Encore Capital Group.
Summary
Encore Capital Group beats FirstCash on 8 of the 15 factors compared between the two stocks.
About FirstCash
FirstCash Holdings, Inc, together with its subsidiaries, operates retail pawn stores in the United States, Mexico, and rest of Latin America. The company operates in three segments: U.S. Pawn, Latin America Pawn, and Retail POS Payment Solutions segments. Its pawn stores lend money on the collateral of pledged personal property, including jewelry, electronics, tools, appliances, sporting goods, and musical instruments; and retails merchandise acquired through collateral forfeitures on forfeited pawn loans and over-the-counter purchases of merchandise directly from customers. The company also provides retail POS payment solutions, which focuses on LTO products and facilitating other retail financing payment options across the network of traditional and e-commerce merchant partners. It serves cash and credit-constrained consumers. The company was formerly known as FirstCash, Inc and changed its name to FirstCash Holdings, Inc. in December 2021. FirstCash Holdings, Inc was incorporated in 1988 and is headquartered in Fort Worth, Texas.
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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