Analyzing World Acceptance (NASDAQ:WRLD) and PROVIDENT Finl/S (FPLPY)

PROVIDENT Finl/S (OTCMKTS: FPLPY) and World Acceptance (NASDAQ:WRLD) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Risk & Volatility

PROVIDENT Finl/S has a beta of -2.51, suggesting that its stock price is 351% less volatile than the S&P 500. Comparatively, World Acceptance has a beta of 2.72, suggesting that its stock price is 172% more volatile than the S&P 500.

Insider and Institutional Ownership

0.0% of PROVIDENT Finl/S shares are held by institutional investors. Comparatively, 93.7% of World Acceptance shares are held by institutional investors. 27.3% of World Acceptance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for PROVIDENT Finl/S and World Acceptance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PROVIDENT Finl/S 0 0 0 0 N/A
World Acceptance 3 0 0 0 1.00

World Acceptance has a consensus target price of $70.67, indicating a potential downside of 38.56%. Given World Acceptance’s higher probable upside, analysts clearly believe World Acceptance is more favorable than PROVIDENT Finl/S.

Dividends

PROVIDENT Finl/S pays an annual dividend of $0.54 per share and has a dividend yield of 6.2%. World Acceptance does not pay a dividend. PROVIDENT Finl/S pays out 66.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares PROVIDENT Finl/S and World Acceptance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PROVIDENT Finl/S $1.54 billion 0.84 -$173.21 million $0.81 10.82
World Acceptance $548.71 million 1.90 $53.68 million $7.71 14.92

World Acceptance has lower revenue, but higher earnings than PROVIDENT Finl/S. PROVIDENT Finl/S is trading at a lower price-to-earnings ratio than World Acceptance, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PROVIDENT Finl/S and World Acceptance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PROVIDENT Finl/S N/A N/A N/A
World Acceptance 9.78% 13.82% 8.05%

Summary

World Acceptance beats PROVIDENT Finl/S on 12 of the 14 factors compared between the two stocks.

PROVIDENT Finl/S Company Profile

Provident Financial plc provides personal credit products to the non-standard lending market in the United Kingdom and the Republic of Ireland. The company offers credit cards; consumer credit, including unsecured and online instalment loans; and finance for cars and light commercial vehicles. It serves 2.5 million customers through its network of branches, call centers, and Websites. The company was founded in 1880 and is headquartered in Bradford, the United Kingdom.

World Acceptance Company Profile

World Acceptance Corporation engages in small-loan consumer finance business. The company offers short-term small and medium-term larger installment loans, as well as related credit insurance and ancillary products and services to individuals. It also provides automobile club memberships to its borrowers; and income tax return preparation and electronic filing services. In addition, the company markets and sells credit life, credit accident and health, credit property, and unemployment insurance in connection with its loans; and develops and provides computer software solutions for the consumer finance industry. It serves individuals with limited access to other sources of consumer credit, including banks, credit unions, other consumer finance businesses, and credit card lenders. As of May 31, 2017, the company operated 1,327 offices in Alabama, Georgia, Idaho, Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, New Mexico, Oklahoma, South Carolina, Texas, Tennessee, and Wisconsin, as well as Mexico. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.

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