Yahoo Finance Here's Why Encore Capital (ECPG) Stock is an Attractive Pick
Historically low mortgage rates and gradual reopening of the economy are likely to benefit Encore Capital Group Inc. ECPG. This mortgage finance provider company offers a profitable investment opportunity based on steady earnings growth and robust fundamentals.
Analysts are optimistic about the company’s prospects. Over the past 30 days, the Zacks Consensus Estimate for 2020 and 2021 earnings has moved 31.4% and 37.1% upward, respectively.
This Zacks Rank #2 (Buy) stock has lost 9.7% year to date compared with the industry’s decline of 40.6%.
Factors That Make Encore Capital Worth a Look
Revenue Strength: Encore Capital’s revenues saw a CAGR of 5.8% over the last five years (2015-2019). The trend is expected to continue in the near term, as is indicated by sales growth rates of 1.5% and 13% for 2020 and 2021, respectively.
Earnings Growth: Encore Capital’s earnings grew 3.6% over the past three-five years. This momentum is likely to continue in the near term, which is indicated by projected earnings growth of 15.5% for 2020 (against the projection of a 42.4% decline for the industry) and 41.2% for 2021.
Further, the company’s long-term (three-five years) earnings growth rate of 43% compared with 16.5% for the industry promises reward for investors.
Stock Seems Undervalued: Encore Capital looks undervalued, with respect to price/earnings (P/E) (F1) and PEG ratios. It has a P/E (F1) ratio of 4.64, which is below the industry average of 9.19. Also, its PEG ratio of 0.11 is lower than the industry average of 0.42.
Also, the stock currently has a Value Score of A. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Other Stocks Worth a Look
Tradeweb Markets Inc.’s TW earnings estimates for the current year have moved nearly 1% north in 30 days’ time. Further, the company’s shares have rallied 41.3% over the past year. At present, it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for 2020 for West Bancorporation WTBA have remained unchanged over the past 30 days. This Zacks #1 Ranked stock has lost 22.5% over the past 12 months.
Eagle Bancorp Montana, Inc. EBMT has witnessed 7.5% upward earnings estimate revision for 2020 in the past 30 days. This Zacks #2 Ranked stock has gained 2.6% over the past year.
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Tradeweb Markets Inc. (TW) : Free Stock Analysis Report
Encore Capital Group Inc (ECPG) : Free Stock Analysis Report
Eagle Bancorp Montana, Inc. (EBMT) : Free Stock Analysis Report
West Bancorporation (WTBA) : Free Stock Analysis Report
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