Reviewing OppFi (NYSE:OPFI) & Credit Acceptance (NASDAQ:CACC)

Credit Acceptance (NASDAQ:CACC) and OppFi (NYSE:OPFI) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

81.7% of Credit Acceptance shares are owned by institutional investors. Comparatively, 7.1% of OppFi shares are owned by institutional investors. 6.1% of Credit Acceptance shares are owned by insiders. Comparatively, 70.2% of OppFi 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.

Profitability

This table compares Credit Acceptance and OppFi’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Credit Acceptance	14.39%	33.84%	5.84%
OppFi	15.62%	26.61%	12.64%

Volatility & Risk

Credit Acceptance has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500. Comparatively, OppFi has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500.

Earnings & Valuation

This table compares Credit Acceptance and OppFi”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credit Acceptance	$2.32 billion	2.24	$423.90 million	$30.62	16.75
OppFi	$597.05 million	0.87	$26.33 million	$1.52	4.03

Credit Acceptance has higher revenue and earnings than OppFi. OppFi is trading at a lower price-to-earnings ratio than Credit Acceptance, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Credit Acceptance and OppFi, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credit Acceptance	1	3	0	0	1.75
OppFi	0	4	2	0	2.33

Credit Acceptance currently has a consensus price target of $505.00, indicating a potential downside of 1.56%. OppFi has a consensus price target of $10.50, indicating a potential upside of 71.43%. Given OppFi’s stronger consensus rating and higher possible upside, analysts clearly believe OppFi is more favorable than Credit Acceptance.

About Credit Acceptance

Credit Acceptance Corporation engages in the provision of financing programs, and related products and services in the United States. The company advances money to automobile dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps the amount collected from the consumers. It is also involved in the business of reinsuring coverage under vehicle service contracts sold to consumers by dealers on vehicles financed by the company. The company serves independent and franchised automobile dealers. Credit Acceptance Corporation was incorporated in 1972 and is headquartered in Southfield, Michigan.

About OppFi

OppFi Inc. operates a cialty finance platform that allows banks to offer credit access. Its platform facilitates the OppLoans, an installment loan product; SalaryTap, a payroll deduction secured installment loan product; and OppFi Card, a credit card product. OppFi Inc. was founded in 2012 and is headquartered in Chicago, Illinois.