Encore Capital Group (NASDAQ:ECPG) vs. OneMain (NYSE:OMF) Financial Review

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

Insider and Institutional Ownership

85.8% of OneMain shares are held by institutional investors. 0.3% of OneMain shares are held by company insiders. Comparatively, 3.0% of Encore Capital Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

OneMain has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Encore Capital Group has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for OneMain and Encore Capital Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OneMain	1	3	9	0	2.62
Encore Capital Group	0	1	4	0	2.80

OneMain currently has a consensus target price of $66.82, suggesting a potential upside of 20.36%. Encore Capital Group has a consensus target price of $128.67, suggesting a potential upside of 14.90%. Given OneMain’s higher probable upside, research analysts clearly believe OneMain is more favorable than Encore Capital Group.

Profitability

This table compares OneMain and Encore Capital Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OneMain	13.43%	21.90%	2.68%
Encore Capital Group	17.67%	34.07%	6.44%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OneMain	$5.46 billion	1.16	$783.00 million	$6.57	8.45
Encore Capital Group	$1.77 billion	1.34	$256.83 million	$15.61	7.17

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

About OneMain

OneMain Holdings, Inc., a financial service holding company, engages in the consumer finance and insurance businesses in the United States. It originates, underwrites, and services personal loans secured by automobiles, other titled collateral, or unsecured. The company also offers credit cards; optional credit insurance products, including life, disability, and involuntary unemployment insurance; optional non-credit insurance; guaranteed asset protection coverage as a waiver product or insurance; and membership plans. It sells its products through its website. The company was formerly known as Springleaf Holdings, Inc. and changed its name to OneMain Holdings, Inc. in November 2015. OneMain Holdings, Inc. was founded in 1912 and is based in Evansville, Indiana.

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.