Reviewing Consumer Portfolio Services (NASDAQ:CPSS) & Bread Financial (NYSE:BFH)

Consumer Portfolio Services (NASDAQ:CPSS) and Bread Financial (NYSE:BFH) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Earnings and Valuation

This table compares Consumer Portfolio Services and Bread Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Consumer Portfolio Services	$434.47 million	0.50	$19.33 million	$1.02	9.83
Bread Financial	$4.70 billion	0.78	$518.00 million	$12.68	7.65

Bread Financial has higher revenue and earnings than Consumer Portfolio Services. Bread Financial is trading at a lower price-to-earnings ratio than Consumer Portfolio Services, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Consumer Portfolio Services has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500. Comparatively, Bread Financial has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500.

Profitability

This table compares Consumer Portfolio Services and Bread Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Consumer Portfolio Services	4.99%	7.48%	0.55%
Bread Financial	11.19%	17.24%	2.56%

Insider and Institutional Ownership

47.6% of Consumer Portfolio Services shares are owned by institutional investors. Comparatively, 99.5% of Bread Financial shares are owned by institutional investors. 63.8% of Consumer Portfolio Services shares are owned by insiders. Comparatively, 1.3% of Bread Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Consumer Portfolio Services and Bread Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Consumer Portfolio Services	0	1	0	0	2.00
Bread Financial	1	8	8	0	2.41

Bread Financial has a consensus target price of $111.71, suggesting a potential upside of 15.21%. Given Bread Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Bread Financial is more favorable than Consumer Portfolio Services.

Summary

Bread Financial beats Consumer Portfolio Services on 12 of the 14 factors compared between the two stocks.

About Consumer Portfolio Services

Consumer Portfolio Services, Inc. (NASDAQ: CPSS) is a specialty finance company that provides indirect automobile financing to consumers, primarily those with limited or impaired credit histories. The company works with franchised and independent automobile dealers to arrange financing for purchasers of new and used vehicles. Consumer Portfolio Services typically purchases retail installment sales contracts originated by its dealer partners and then services the related automotive loans. Its activities include underwriting, loan administration, payment processing, collections and other portfolio-servicing functions.

About Bread Financial

Bread Financial is a consumer financial services company that works with retailers and other businesses to offer payment and lending products. Its services include private-label and co-branded credit cards, installment payment options and other financing solutions designed for purchases with participating merchants. The company also offers deposit products through Bread Savings, including online savings accounts and certificates of deposit. Its products serve consumers primarily in the United States.