CBIZ (NYSE: CBZ) and PRA Group (NASDAQ:PRAA) are both small-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Volatility & Risk

CBIZ has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, PRA Group has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for CBIZ and PRA Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CBIZ 0 0 0 0 N/A
PRA Group 2 0 2 0 2.00

PRA Group has a consensus target price of $38.00, suggesting a potential upside of 26.04%. Given PRA Group’s higher probable upside, analysts clearly believe PRA Group is more favorable than CBIZ.

Profitability

This table compares CBIZ and PRA Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CBIZ 5.54% 9.42% 4.22%
PRA Group 9.76% 4.69% 1.41%

Insider & Institutional Ownership

85.6% of CBIZ shares are owned by institutional investors. 6.9% of CBIZ shares are owned by company insiders. Comparatively, 2.1% of PRA Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares CBIZ and PRA Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CBIZ $831.05 million 1.08 $91.52 million $0.83 19.82
PRA Group $784.13 million 1.74 $280.49 million $1.64 18.38

PRA Group has higher revenue, but lower earnings than CBIZ. PRA Group is trading at a lower price-to-earnings ratio than CBIZ, indicating that it is currently the more affordable of the two stocks.

Summary

PRA Group beats CBIZ on 7 of the 13 factors compared between the two stocks.

About CBIZ

CBIZ, Inc. (CBIZ) is engaged in the professional services business. The Company operates its professional services business through acquiring and integrating accounting and financial service providers, group health benefits consulting firms, property and casualty brokerage firms, payroll service providers, and valuation and other service firms throughout the United States. Its segments include Financial Services, Benefits and Insurance Services, National Practices, and Corporate and Other. The Financial Services group includes accounting and tax, government healthcare consulting, financial advisory, valuation, and risk and advisory services. The Benefits and Insurance Services group includes group health benefits consulting, payroll, property and casualty, and retirement plan services. The National Practices segment includes managed networking and hardware services, and healthcare consulting.

About PRA Group

PRA Group, Inc. (PRA Group) is a financial and business services company with operations in the Americas and Europe. The Company’s primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company operates through the account receivables management segment. It also provides fee-based services, such as vehicle location, skip tracing and collateral recovery for auto lenders, government entities and law enforcement; revenue administration, audit and revenue discovery/recovery services for local government entities; class action claims recovery services and purchases; servicing of consumer bankruptcy accounts in the United States, and contingent collections of nonperforming loans in Europe and South America. The Company’s portfolio of nonperforming loans includes a set of accounts that can be categorized by asset type, age and size of account, level of previous collection efforts, payment history, and geography.

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