Critical Comparison: Encore Capital Group (NASDAQ:ECPG) versus Palmer Square Capital BDC (NYSE:PSBD)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Palmer Square Capital BDC	96.09%	23.31%	9.23%
Encore Capital Group	-16.89%	9.46%	2.27%

Earnings and Valuation

This table compares Palmer Square Capital BDC and Encore Capital Group’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palmer Square Capital BDC	$112.22 million	4.70	$107.84 million	N/A	N/A
Encore Capital Group	$1.22 billion	0.78	-$206.49 million	($8.78)	-4.62

Palmer Square Capital BDC has higher earnings, but lower revenue than Encore Capital Group.

Analyst Ratings

This is a summary of recent recommendations for Palmer Square Capital BDC and Encore Capital Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palmer Square Capital BDC	0	2	4	0	2.67
Encore Capital Group	0	0	2	0	3.00

Palmer Square Capital BDC presently has a consensus price target of $16.83, suggesting a potential upside of 3.91%. Encore Capital Group has a consensus price target of $64.50, suggesting a potential upside of 59.10%. Given Encore Capital Group’s stronger consensus rating and higher probable upside, analysts plainly believe Encore Capital Group is more favorable than Palmer Square Capital BDC.

Institutional & Insider Ownership

6.5% of Palmer Square Capital BDC shares are held by institutional investors. 2.9% of Encore Capital Group 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.

Summary

Palmer Square Capital BDC beats Encore Capital Group on 7 of the 11 factors compared between the two stocks.

About Palmer Square Capital BDC

Palmer Square Capital BDC Inc. is an externally managed, non-diversified closed-end management investment company which primarily lends to and invests in corporate debt securities, including small to large private U.S. companies and has elected to be regulated as a business development company. Palmer Square Capital BDC Inc. is based in MISSION WOODS, Kan.

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.