OneMain (NYSE:OMF – 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 contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.
Analyst Ratings
This is a summary of recent recommendations for OneMain and Encore Capital Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| OneMain | 1 | 3 | 9 | 0 | 2.62 |
| Encore Capital Group | 0 | 0 | 4 | 1 | 3.20 |
OneMain currently has a consensus target price of $66.82, suggesting a potential upside of 21.06%. Encore Capital Group has a consensus target price of $128.67, suggesting a potential upside of 14.86%. Given OneMain’s higher probable upside, equities analysts clearly believe OneMain is more favorable than Encore Capital Group.
Valuation and Earnings
This table compares OneMain and Encore Capital Group”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| OneMain | $5.46 billion | 1.16 | $783.00 million | $6.57 | 8.40 |
| Encore Capital Group | $1.77 billion | 1.32 | $256.83 million | $15.61 | 7.18 |
OneMain has higher revenue and earnings than Encore Capital Group. Encore Capital Group is trading at a lower price-to-earnings ratio than OneMain, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
OneMain has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500. Comparatively, Encore Capital Group has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.
Profitability
This table compares OneMain and Encore Capital Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| OneMain | 13.43% | 21.90% | 2.68% |
| Encore Capital Group | 17.67% | 33.67% | 6.37% |
Institutional and Insider Ownership
85.8% of OneMain shares are held by institutional investors. 0.3% of OneMain shares are held by insiders. Comparatively, 3.0% of Encore Capital Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
Encore Capital Group beats OneMain on 8 of the 15 factors compared between the two stocks.
About OneMain
OneMain Holdings, Inc. is a consumer finance company that provides personal loans to customers, including borrowers who may have limited access to traditional credit. Its offerings include secured and unsecured installment loans, which customers can apply for through its branches or digital channels. The company also offers credit-related insurance and other products designed to complement its lending services. OneMain serves customers across the United States through a nationwide branch network and online services.
About Encore Capital Group
Encore Capital Group (NASDAQ: ECPG) is a specialty finance company that purchases portfolios of charged-off consumer debt and works to recover amounts owed. Its activities include managing repayment arrangements and providing customer support through its own operations and service providers. The company operates through businesses including Midland Credit Management in the United States and Cabot Credit Management in the United Kingdom and other European markets. Its operations also include customer-service and support functions in India.
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