NasdaqGS:ECPG

Stock Analysis Report

Executive Summary

Encore Capital Group, Inc., a specialty finance company, together with its subsidiaries, provides debt recovery solutions and other related services for consumers across a range of financial assets worldwide.


Snowflake Analysis

Undervalued with solid track record.


Similar Companies

Share Price & News

How has Encore Capital Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ECPG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.2%

ECPG

-1.3%

US Consumer Finance

-1.0%

US Market


1 Year Return

2.0%

ECPG

12.9%

US Consumer Finance

18.0%

US Market

Return vs Industry: ECPG underperformed the US Consumer Finance industry which returned 12.9% over the past year.

Return vs Market: ECPG underperformed the US Market which returned 18% over the past year.


Shareholder returns

ECPGIndustryMarket
7 Day-4.2%-1.3%-1.0%
30 Day-7.1%-2.1%0.6%
90 Day-3.9%4.4%7.9%
1 Year2.0%2.0%14.7%12.9%20.4%18.0%
3 Year-2.4%-2.4%39.5%32.8%48.0%38.5%
5 Year-14.2%-14.2%45.6%35.2%72.2%53.3%

Price Volatility Vs. Market

How volatile is Encore Capital Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Encore Capital Group undervalued compared to its fair value and its price relative to the market?

39.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ECPG ($34.3) is trading below our estimate of fair value ($57.1)

Significantly Below Fair Value: ECPG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ECPG is good value based on its PE Ratio (6.2x) compared to the Consumer Finance industry average (8.7x).

PE vs Market: ECPG is good value based on its PE Ratio (6.2x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: ECPG is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: ECPG is overvalued based on its PB Ratio (1.2x) compared to the US Consumer Finance industry average (1.1x).


Next Steps

Future Growth

How is Encore Capital Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

11.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ECPG's forecast earnings growth (11.7% per year) is above the savings rate (1.7%).

Earnings vs Market: ECPG's earnings (11.7% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: ECPG's earnings are forecast to grow, but not significantly.

Revenue vs Market: ECPG's revenue (4.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: ECPG's revenue (4.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ECPG's Return on Equity is forecast to be low in 3 years time (18.2%).


Next Steps

Past Performance

How has Encore Capital Group performed over the past 5 years?

9.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ECPG has high quality earnings.

Growing Profit Margin: ECPG's current net profit margins (12.5%) are higher than last year (6.3%).


Past Earnings Growth Analysis

Earnings Trend: ECPG's earnings have grown by 9.5% per year over the past 5 years.

Accelerating Growth: ECPG's earnings growth over the past year (110.7%) exceeds its 5-year average (9.5% per year).

Earnings vs Industry: ECPG earnings growth over the past year (110.7%) exceeded the Consumer Finance industry 11.4%.


Return on Equity

High ROE: ECPG's Return on Equity (18.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Encore Capital Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: ECPG has a low level of unsold assets or inventory.

Debt Coverage by Assets: ECPG's debt is covered by short term assets (assets are 1x debt).


Financial Institutions Analysis

Asset Level: ECPG's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if ECPG has a sufficient allowance for bad loans.

Low Risk Liabilities: ECPG reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if ECPG has an acceptable proportion of non-loan assets held.

Low Risk Deposits: ECPG has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if ECPG has an appropriate level of bad loans.


Next Steps

Dividend

What is Encore Capital Group's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate ECPG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ECPG's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ECPG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ECPG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ECPG's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure


CEO

Ashish Masih (53yo)

2.7yrs

Tenure

US$2,795,067

Compensation

Mr. Ashish Masih has been the Chief Executive Officer and President of Encore Capital Group, Inc. since June 15, 2017. Mr. Masih served as President of Midland Credit Management at Encore Capital Group, In ...


CEO Compensation Analysis

Compensation vs Market: Ashish's total compensation ($USD2.80M) is about average for companies of similar size in the US market ($USD2.50M).

Compensation vs Earnings: Ashish's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ashish Masih
President2.7yrsUS$2.80m0.33% $3.6m
Jonathan Clark
Executive VP5yrsUS$2.08m0.21% $2.3m
Gregory Call
Executive VP2.6yrsUS$1.40m0.17% $1.8m
Monique Dumais
Chief Information Officer0.8yrsno datano data
Bruce Thomas
Vice President of Investor Relations0yrsno datano data
Amy Anuk
Senior Vice President of Business Development0yrsno datano data
Tracy Ting
Senior VP & Chief Human Resources Officer0.4yrsno datano data
Sheryl Wright
Senior Vice President of Corporate & Government Affairs7.5yrsno datano data
Ryan Bell
Executive VP & COO of Midland Credit Management2.8yrsno data0.034% $364.9k
John Yung
Senior VP and Group Executive for Latin America & Asia Pacific4.6yrsno datano data

2.7yrs

Average Tenure

52.5yo

Average Age

Experienced Management: ECPG's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ashish Masih
President2.7yrsUS$2.80m0.33% $3.6m
Laura Olle
Independent Director6yrsUS$235.66kno data
Michael Monaco
Non-Executive Chairman2.3yrsUS$333.16kno data
Norman Raúl Sorensen Valdez
Independent Director8.2yrsUS$250.38k0.0064% $70.0k
Ashwini Gupta
Independent Director4.4yrsUS$231.66k0.016% $174.9k
Angela Knight
Independent Director0.4yrsno data0.014% $153.0k
Richard Srednicki
Independent Director6yrsUS$209.99k0.080% $871.1k
Wendy Hannam
Independent Director4.4yrsUS$228.99k0.0080% $87.5k
Francis Quinlan
Independent Director8.4yrsUS$231.21k0.00064% $7.0k
Richard Stovsky
Independent Director1.5yrsUS$192.25kno data

4.4yrs

Average Tenure

67.5yo

Average Age

Experienced Board: ECPG's board of directors are considered experienced (4.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 15.5%.


Top Shareholders

Company Information

Encore Capital Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Encore Capital Group, Inc.
  • Ticker: ECPG
  • Exchange: NasdaqGS
  • Founded: 1999
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: US$1.086b
  • Shares outstanding: 31.06m
  • Website: https://www.encorecapital.com

Number of Employees


Location

  • Encore Capital Group, Inc.
  • 3111 Camino Del Rio North
  • Suite 103
  • San Diego
  • California
  • 92108
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ECPGNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 1999

Biography

Encore Capital Group, Inc., a specialty finance company, together with its subsidiaries, provides debt recovery solutions and other related services for consumers across a range of 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 early stage collections, business process outsourcing, contingent collections, and trace services and litigation activities; and the management of non-performing loans, as well as provides portfolio management services to banks for non-performing loans. Encore Capital Group, Inc. was incorporated in 1999 and is headquartered in San Diego, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 00:31
End of Day Share Price2020/02/21 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.