Comparing Aaron’s (NYSE:PRG) & World Acceptance (NASDAQ:WRLD)

Aaron’s (NYSE:PRG) and World Acceptance (NASDAQ:WRLD) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.

Volatility & Risk

Aaron’s has a beta of 1.77, indicating that its stock price is 77% more volatile than the S&P 500. Comparatively, World Acceptance has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Institutional & Insider Ownership

97.9% of Aaron’s shares are held by institutional investors. Comparatively, 83.6% of World Acceptance shares are held by institutional investors. 3.2% of Aaron’s shares are held by insiders. Comparatively, 41.6% of World Acceptance shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Aaron’s and World Acceptance”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aaron’s	$2.46 billion	0.56	$197.25 million	$5.06	6.92
World Acceptance	$564.84 million	1.60	$89.74 million	$14.82	11.21

Aaron’s has higher revenue and earnings than World Acceptance. Aaron’s is trading at a lower price-to-earnings ratio than World Acceptance, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Aaron’s and World Acceptance’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aaron’s	8.53%	22.54%	9.98%
World Acceptance	14.29%	18.95%	7.74%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Aaron’s and World Acceptance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aaron’s	1	1	4	1	2.71
World Acceptance	0	1	0	0	2.00

Aaron’s currently has a consensus price target of $41.00, suggesting a potential upside of 17.16%. World Acceptance has a consensus price target of $10.00, suggesting a potential downside of 93.98%. Given Aaron’s’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Aaron’s is more favorable than World Acceptance.

Summary

Aaron’s beats World Acceptance on 10 of the 15 factors compared between the two stocks.

About Aaron’s

PROG Holdings, Inc. (NYSE:PRG) is a financial technology holding company based in Salt Lake City, Utah with three business segments: Progressive Leasing, which offers lease-to-own transactions primarily to credit-challenged consumers through e-commerce and point-of-sale retail partners, via online, mobile, and in-store solutions; Vive Financial, which provides consumers who may not qualify for traditional prime lending with a variety of second-look, revolving credit products through private label and branded credit cards; and Four Technologies, which provides consumers of all credit backgrounds Buy Now, Pay Later (BNPL) options through four interest-free installments via its platform, Four.

About World Acceptance

World Acceptance Corporation engages in consumer finance business in the United States. The company provides short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It offers income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.