Ally Financial (NYSE: ALLY) and Cash America International (NYSE:CSH) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Ally Financial and Cash America International, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Ally Financial | 1 | 3 | 12 | 0 | 2.69 |
| Cash America International | 0 | 1 | 1 | 0 | 2.50 |
Ally Financial currently has a consensus price target of $25.38, suggesting a potential upside of 11.73%. Cash America International has a consensus price target of $57.00, suggesting a potential upside of 35.07%. Given Cash America International’s higher possible upside, analysts plainly believe Cash America International is more favorable than Ally Financial.
Dividends
Ally Financial pays an annual dividend of $0.48 per share and has a dividend yield of 2.1%. Cash America International pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Ally Financial pays out 24.5% of its earnings in the form of a dividend. Cash America International pays out 27.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cash America International has raised its dividend for 2 consecutive years. Ally Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
98.6% of Ally Financial shares are held by institutional investors. 0.2% of Ally Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Volatility and Risk
Ally Financial has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Cash America International has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.
Earnings & Valuation
This table compares Ally Financial and Cash America International’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Ally Financial | $5.95 billion | 1.83 | $940.41 million | $1.96 | 11.59 |
| Cash America International | N/A | N/A | N/A | $1.18 | 35.76 |
Ally Financial has higher revenue and earnings than Cash America International. Ally Financial is trading at a lower price-to-earnings ratio than Cash America International, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Ally Financial and Cash America International’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Ally Financial | 13.83% | 7.55% | 0.63% |
| Cash America International | 0.87% | 0.86% | 0.64% |
Summary
Ally Financial beats Cash America International on 11 of the 14 factors compared between the two stocks.
About Ally Financial
Ally Financial Inc. is a digital financial services company. The Company is a bank and financial holding company. Its segments include Automotive Finance operations, Insurance operations, Mortgage Finance operations, Corporate Finance operations, and Corporate and Other. The Automotive Finance operations segment provides the United States-based automotive financing services to consumers and automotive dealers, and automotive and equipment financing services to companies and municipalities. The Insurance operations segment offers both consumer finance protection and insurance products sold through the automotive dealer channel, and commercial insurance products sold directly to dealers. The Mortgage Finance operations segment consists of the management of a held-for-investment consumer mortgage finance loan portfolio. The Corporate Finance operations segment provides senior secured leveraged cash flow and asset-based loans to mostly the United States-based middle market companies.
About Cash America International
Cash America International, Inc. provides specialty financial services to individuals through its storefront lending and franchised check cashing locations. The Company offers secured non-recourse loans, referred to as pawn loans, as its primary line of business. The Company is also engaged in originating, arranging, guaranteeing or purchasing consumer loans in some of its locations. The Company also offers check cashing and other ancillary products and services, including money orders, wire transfers and auto insurance. The Company’s franchised check cashing business offers check cashing services through its franchised check cashing centers. The Company provides its services in the United States under the names Cash America Pawn, SuperPawn, Cash America Payday Advance, Cashland and Mr. Payroll. The Company is engaged in pawn lending activities, merchandise disposition activities, consumer loan activities and check cashing and other financial services.
Receive News & Ratings for Ally Financial Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Ally Financial Inc. and related companies with MarketBeat.com's FREE daily email newsletter.
