Analyzing PRA Group (PRAA) and General Finance Corporation (GFN)
PRA Group (NASDAQ: PRAA) and General Finance Corporation (NASDAQ:GFN) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.
Volatility and Risk
PRA Group has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500. Comparatively, General Finance Corporation has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.
Institutional and Insider Ownership
19.1% of General Finance Corporation shares are owned by institutional investors. 2.1% of PRA Group shares are owned by company insiders. Comparatively, 25.9% of General Finance Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a summary of current recommendations for PRA Group and General Finance Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|General Finance Corporation||0||1||1||0||2.50|
PRA Group presently has a consensus price target of $40.00, indicating a potential upside of 15.77%. General Finance Corporation has a consensus price target of $9.20, indicating a potential upside of 48.39%. Given General Finance Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe General Finance Corporation is more favorable than PRA Group.
This table compares PRA Group and General Finance Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|General Finance Corporation||-0.73%||-1.29%||-0.31%|
Valuation and Earnings
This table compares PRA Group and General Finance Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|PRA Group||$830.58 million||1.88||$85.09 million||$1.24||27.86|
|General Finance Corporation||$276.93 million||0.60||-$2.96 million||($0.21)||-29.52|
PRA Group has higher revenue and earnings than General Finance Corporation. General Finance Corporation is trading at a lower price-to-earnings ratio than PRA Group, indicating that it is currently the more affordable of the two stocks.
PRA Group beats General Finance Corporation on 8 of the 13 factors compared between the two stocks.
PRA Group Company Profile
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.
General Finance Corporation Company Profile
General Finance Corporation is a specialty rental services company. The Company offers a range of portable storage units, including its core 20-feet and 40-feet steel containers, office container, mobile office and modular space products and steel tanks. It has two geographic areas that include its four operating segments: the Asia-Pacific area, consisting of the leasing operations of Royal Wolf Holdings Limited and its Australian and New Zealand subsidiaries (Royal Wolf), and North America, consisting of the combined leasing operations of Pac-Van, Inc. and its Canadian subsidiary, PV Acquisition Corp. (Pac-Van) and Lone Star Tank Rental Inc. (Lone Star), and the manufacturing operations of GFN Manufacturing Corporation and its subsidiary, Southern Frac, LLC (Southern Frac). As of June 30, 2016, the Company provided its storage solutions to over 41,000 customers across a range of industries, including commercial, construction, retail, transportation, education and others.
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