Credit Acceptance (NASDAQ:CACC – Get Free Report) and FirstCash (NASDAQ:FCFS – Get Free Report) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.
Analyst Ratings
This is a summary of recent ratings for Credit Acceptance and FirstCash, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Credit Acceptance | 0 | 3 | 1 | 0 | 2.25 |
| FirstCash | 0 | 2 | 3 | 1 | 2.83 |
Credit Acceptance currently has a consensus price target of $570.00, indicating a potential downside of 3.80%. FirstCash has a consensus price target of $212.33, indicating a potential upside of 2.09%. Given FirstCash’s stronger consensus rating and higher probable upside, analysts plainly believe FirstCash is more favorable than Credit Acceptance.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Credit Acceptance | 21.54% | 31.93% | 5.68% |
| FirstCash | 9.42% | 19.65% | 8.38% |
Volatility & Risk
Credit Acceptance has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, FirstCash has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500.
Institutional and Insider Ownership
81.7% of Credit Acceptance shares are held by institutional investors. Comparatively, 80.3% of FirstCash shares are held by institutional investors. 6.1% of Credit Acceptance shares are held by insiders. Comparatively, 2.9% of FirstCash shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Credit Acceptance and FirstCash”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Credit Acceptance | $2.32 billion | 2.67 | $423.90 million | $40.24 | 14.72 |
| FirstCash | $4.12 billion | 2.19 | $330.38 million | $8.76 | 23.74 |
Credit Acceptance has higher earnings, but lower revenue than FirstCash. Credit Acceptance is trading at a lower price-to-earnings ratio than FirstCash, indicating that it is currently the more affordable of the two stocks.
Summary
Credit Acceptance beats FirstCash on 8 of the 15 factors compared between the two stocks.
About Credit Acceptance
Credit Acceptance Corporation engages in the provision of financing programs, and related products and services in the United States. The company advances money to automobile dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps the amount collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. The company serves independent and franchised automobile dealers. Credit Acceptance Corporation was incorporated in 1972 and is headquartered in Southfield, Michigan.
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.
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