Reviewing Encore Capital Group (NASDAQ:ECPG) and Dave (NASDAQ:DAVE)

Encore Capital Group (NASDAQ:ECPG) and Dave (NASDAQ:DAVE) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.

Valuation & Earnings

This table compares Encore Capital Group and Dave”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Encore Capital Group	$1.77 billion	1.17	$256.83 million	$13.21	7.40
Dave	$643.65 million	7.22	$195.87 million	$15.42	23.63

Encore Capital Group has higher revenue and earnings than Dave. Encore Capital Group is trading at a lower price-to-earnings ratio than Dave, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Encore Capital Group and Dave’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%
Dave	34.58%	77.46%	40.44%

Institutional and Insider Ownership

18.0% of Dave shares are owned by institutional investors. 3.0% of Encore Capital Group shares are owned by company insiders. Comparatively, 23.6% of Dave shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Encore Capital Group and Dave, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Encore Capital Group	0	0	5	1	3.17
Dave	0	3	13	0	2.81

Encore Capital Group currently has a consensus price target of $89.75, indicating a potential downside of 8.19%. Dave has a consensus price target of $418.25, indicating a potential upside of 14.79%. Given Dave’s higher probable upside, analysts plainly believe Dave is more favorable than Encore Capital Group.

Risk & Volatility

Encore Capital Group has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, Dave has a beta of 3.83, suggesting that its stock price is 283% more volatile than the S&P 500.

Summary

Dave beats Encore Capital Group 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 Dave

Dave, Inc. is a digital banking service. Its products include a budgeting tool to help members manage their upcoming bills to avoid overspending, cash advances through its flagship ExtraCash product to help members avoid punitive overdraft fees, a Side Hustle product, where Dave helps connect members with supplemental work opportunities, and Dave Banking, a modern checking account experience with valuable tools for building long-term financial health. The company was founded by Jason Wilk, Paras Chitrakar, and John Wolanin in October 2015 and is headquartered in Los Angeles, CA.