Palmer Square Capital BDC (NYSE:PSBD – Get Free Report) and Encore Capital Group (NASDAQ:ECPG – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.
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% |
Analyst Recommendations
This is a summary of current ratings for Palmer Square Capital BDC and Encore Capital Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Palmer Square Capital BDC | 0 | 3 | 4 | 0 | 2.57 |
| Encore Capital Group | 0 | 0 | 2 | 0 | 3.00 |
Valuation and Earnings
This table compares Palmer Square Capital BDC and Encore Capital Group’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Palmer Square Capital BDC | $112.22 million | 4.69 | $107.84 million | N/A | N/A |
| Encore Capital Group | $1.22 billion | 0.81 | -$206.49 million | ($8.78) | -4.76 |
Palmer Square Capital BDC has higher earnings, but lower revenue than Encore Capital Group.
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 hedge funds, endowments and large money managers believe a stock 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.
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