First Cash (NYSE: FCFS) and PHH (NYSE:PHH) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Dividends

First Cash pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. PHH does not pay a dividend. First Cash pays out 34.2% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares First Cash and PHH’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Cash $1.09 billion 2.94 $60.12 million $2.34 28.97
PHH $622.00 million 0.59 -$202.00 million ($5.74) -1.95

First Cash has higher revenue and earnings than PHH. PHH is trading at a lower price-to-earnings ratio than First Cash, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for First Cash and PHH, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Cash 0 2 5 0 2.71
PHH 0 2 1 0 2.33

First Cash currently has a consensus target price of $64.00, indicating a potential downside of 5.60%. PHH has a consensus target price of $15.83, indicating a potential upside of 41.37%. Given PHH’s higher probable upside, analysts clearly believe PHH is more favorable than First Cash.

Institutional and Insider Ownership

95.7% of First Cash shares are owned by institutional investors. Comparatively, 93.3% of PHH shares are owned by institutional investors. 2.8% of First Cash shares are owned by company insiders. Comparatively, 2.5% of PHH shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares First Cash and PHH’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Cash 6.41% 8.45% 5.91%
PHH -71.84% -27.98% -9.33%

Risk & Volatility

First Cash has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, PHH has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500.

Summary

First Cash beats PHH on 12 of the 15 factors compared between the two stocks.

First Cash Company Profile

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.

PHH Company Profile

PHH Corporation is a standalone mortgage company. The Company provides outsourced mortgage banking services to a range of clients, including financial institutions and real estate brokers throughout the United States, and is focused on originating, selling, servicing and subservicing residential mortgage loans through its subsidiary, PHH Mortgage Corporation and its subsidiaries. It operates through two segments: Mortgage Production and Mortgage Servicing. The Mortgage Production segment provides mortgage loan origination services and sells mortgage loans. The Mortgage Servicing segment performs servicing activities for loans originated by the Company and mortgage servicing rights purchased from others, and acts as a subservicer for certain clients that own the underlying mortgage servicing rights. The Mortgage Production segment provides private label mortgage services to financial institutions and real estate brokers, and sources mortgage loans through its retail platform.

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