Reviewing Regional Management (RM) & First Cash (FCFS)
Regional Management (NYSE: RM) and First Cash (NYSE:FCFS) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.
Institutional & Insider Ownership
86.4% of Regional Management shares are held by institutional investors. Comparatively, 95.7% of First Cash shares are held by institutional investors. 9.5% of Regional Management shares are held by insiders. Comparatively, 2.8% of First Cash shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
First Cash pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Regional Management does not pay a dividend. First Cash pays out 34.2% of its earnings in the form of a dividend.
This table compares Regional Management and First Cash’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Regional Management and First Cash’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Regional Management||$240.52 million||1.20||$24.03 million||$2.17||11.35|
|First Cash||$1.09 billion||2.91||$60.12 million||$2.34||28.72|
First Cash has higher revenue and earnings than Regional Management. Regional Management is trading at a lower price-to-earnings ratio than First Cash, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Regional Management has a beta of 1.38, meaning that its stock price is 38% more volatile than the S&P 500. Comparatively, First Cash has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.
This is a breakdown of current recommendations for Regional Management and First Cash, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Regional Management currently has a consensus price target of $26.00, suggesting a potential upside of 5.52%. First Cash has a consensus price target of $64.00, suggesting a potential downside of 4.76%. Given Regional Management’s higher probable upside, research analysts plainly believe Regional Management is more favorable than First Cash.
First Cash beats Regional Management on 10 of the 16 factors compared between the two stocks.
About Regional Management
Regional Management Corp. is a diversified consumer finance company. The Company provides an array of loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies and other traditional lenders. Its products include small loans, large loans, automobile loans, retail loans, and optional payment and collateral protection insurance products. It offers small loans ranging from $500 to $2,500, through its branches. It offers large installment loans with cash proceeds to the customer ranging from $2,501 to $20,000. As of December 31, 2016, automobile loans were offered in amounts up to $27,500. As of December 31, 2016, retail loans were indirect installment loans structured as retail installment sales contracts that were offered in amounts of up to $7,500. Optional Payment and Collateral Protection Insurance Products offer customers a number of optional payment and collateral protection insurance products.
About First Cash
FirstCash, Inc., formerly First Cash Financial Services, Inc., is an operator of retail-based pawn stores in the United States and Latin America. The Company’s primary business is the operation of full-service pawn stores, which make small pawn loans secured by personal property, such as consumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. The Company’s operates through two segments: the U.S. operations segment and the Latin America operations segment. The U.S. operations segment consists of all pawn and consumer loan operations in the United States and the Latin America operations segment consists of all pawn and consumer loan operations in Latin America, which includes operations in Mexico, Guatemala and El Salvador. In addition, some of the Company’s pawn stores offer small unsecured consumer loans or credit services products. The Company also operates consumer finance stores in Texas and Mexico.
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