Analyzing Consumer Portfolio Services (NASDAQ:CPSS) & FlexShopper (NASDAQ:FPAY)

Consumer Portfolio Services (NASDAQ:CPSS) and FlexShopper (NASDAQ:FPAY) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitability.

Analyst Ratings

This is a summary of current recommendations and price targets for Consumer Portfolio Services and FlexShopper, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consumer Portfolio Services	1	0	0	0	1.00
FlexShopper	1	0	1	0	2.00

FlexShopper has a consensus target price of $0.50, suggesting a potential upside of 0.00%. Given FlexShopper’s stronger consensus rating and higher probable upside, analysts plainly believe FlexShopper is more favorable than Consumer Portfolio Services.

Profitability

This table compares Consumer Portfolio Services and FlexShopper’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Consumer Portfolio Services	4.53%	6.49%	0.53%
FlexShopper	N/A	N/A	N/A

Insider & Institutional Ownership

47.6% of Consumer Portfolio Services shares are owned by institutional investors. Comparatively, 19.4% of FlexShopper shares are owned by institutional investors. 63.7% of Consumer Portfolio Services shares are owned by company insiders. Comparatively, 30.2% of FlexShopper shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Consumer Portfolio Services and FlexShopper”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Consumer Portfolio Services	$393.51 million	0.49	$19.20 million	$0.80	10.88
FlexShopper	$139.80 million	0.00	-$180,000.00	($0.23)	N/A

Consumer Portfolio Services has higher revenue and earnings than FlexShopper. FlexShopper is trading at a lower price-to-earnings ratio than Consumer Portfolio Services, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Consumer Portfolio Services has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, FlexShopper has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Summary

Consumer Portfolio Services beats FlexShopper on 10 of the 13 factors compared between the two stocks.

About Consumer Portfolio Services

Consumer Portfolio Services, Inc. operates as a specialty finance company in the United States. It is involved in the purchase and service of retail automobile contracts originated by franchised automobile dealers and select independent dealers in the sale of new and used automobiles, light trucks, and passenger vans. The company, through its automobile contract purchases, offers indirect financing to the customers of dealers with limited credit histories or past credit problems. It also serves as an alternative source of financing for dealers, facilitating sales to customers who are not able to obtain financing from commercial banks, credit unions, and the captive finance companies. In addition, the company acquires installment purchase contracts in merger and acquisition transactions; purchases immaterial amounts of vehicle purchase money loans from non-affiliated lenders. It services its automobile contracts through its branches in California, Nevada, Virginia, Florida, and Illinois. The company was incorporated in 1991 and is based in Las Vegas, Nevada.

About FlexShopper

FlexShopper, Inc., a financial technology company, operates an e-commerce marketplace to shop electronics, home furnishings, and other durable goods on a lease-to-own (LTO) basis. The company offers consumer electronics; home appliances; computers, such as tablets and wearables; smartphones; tires; and jewelry and furniture, including accessories. It also provides payment options to consumers. The company offers its products under the LG, Samsung, Sony, TCL, Frigidaire, General Electric, Whirlpool, Apple, Asus, Dell, Hewlett Packard, Toshiba, Resident, Sealy, and Ashley brands. The company was formerly known as Anchor Funding Services, Inc. and changed its name to FlexShopper, Inc. in October 2013. FlexShopper, Inc. was founded in 2003 and is headquartered in Boca Raton, Florida.