PRA Group (NASDAQ: PRAA) and Ituran Location and Control (NASDAQ:ITRN) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitability.

Analyst Ratings

This is a breakdown of current ratings and price targets for PRA Group and Ituran Location and Control, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PRA Group 0 0 3 0 3.00
Ituran Location and Control 0 0 1 0 3.00

PRA Group presently has a consensus target price of $38.00, indicating a potential upside of 34.28%. Ituran Location and Control has a consensus target price of $31.00, indicating a potential downside of 7.46%. Given PRA Group’s higher possible upside, research analysts plainly believe PRA Group is more favorable than Ituran Location and Control.

Profitability

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

Net Margins Return on Equity Return on Assets
PRA Group 9.76% 4.69% 1.41%
Ituran Location and Control 18.67% 36.12% 22.00%

Earnings & Valuation

This table compares PRA Group and Ituran Location and Control’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
PRA Group $784.13 million 1.63 $280.49 million $1.64 17.26
Ituran Location and Control $218.77 million 3.21 $65.10 million $1.95 17.18

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

Dividends

Ituran Location and Control pays an annual dividend of $0.96 per share and has a dividend yield of 2.9%. PRA Group does not pay a dividend. Ituran Location and Control pays out 49.2% of its earnings in the form of a dividend.

Volatility & Risk

PRA Group has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, Ituran Location and Control has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

51.8% of Ituran Location and Control shares are held by institutional investors. 2.1% of PRA Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

PRA Group beats Ituran Location and Control on 8 of the 15 factors compared between the two stocks.

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.

About Ituran Location and Control

Ituran Location and Control Ltd. is a provider of location-based services, consisting of stolen vehicle recovery (SVR), fleet management services and other tracking services. The Company also provides wireless communication products used in connection with its location-based services and various other applications. Its operations consist of two segments: location-based services and wireless communications products. Its location-based services segment consists of its SVR and tracking services, fleet management and value-added services consisted of personal locater services and concierge services. Its wireless communications products segment consists of short and medium range two-way machine-to-machine wireless communications products that are used for various applications, including automatic vehicle location (AVL) and automatic vehicle identification. It primarily provides its services, as well as sells and leases its products in Israel, Brazil, Argentina and the United States.

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