Santander Consumer USA (NYSE: SC) and Credit Acceptance (NASDAQ:CACC) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, profitability and analyst recommendations.
Profitability
This table compares Santander Consumer USA and Credit Acceptance’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Santander Consumer USA | 19.62% | 12.73% | 1.95% |
| Credit Acceptance | 42.36% | 30.18% | 8.37% |
Santander Consumer USA pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Credit Acceptance does not pay a dividend. Santander Consumer USA pays out 11.5% of its earnings in the form of a dividend.
Analyst Recommendations
This is a breakdown of current recommendations for Santander Consumer USA and Credit Acceptance, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Santander Consumer USA | 0 | 8 | 7 | 0 | 2.47 |
| Credit Acceptance | 4 | 3 | 1 | 0 | 1.63 |
Santander Consumer USA currently has a consensus price target of $19.08, suggesting a potential upside of 2.51%. Credit Acceptance has a consensus price target of $276.71, suggesting a potential downside of 14.25%. Given Santander Consumer USA’s stronger consensus rating and higher probable upside, analysts plainly believe Santander Consumer USA is more favorable than Credit Acceptance.
Valuation and Earnings
This table compares Santander Consumer USA and Credit Acceptance’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Santander Consumer USA | $6.56 billion | 1.02 | $1.19 billion | $1.74 | 10.70 |
| Credit Acceptance | $1.11 billion | 5.61 | $470.20 million | $20.44 | 15.79 |
Santander Consumer USA has higher revenue and earnings than Credit Acceptance. Santander Consumer USA is trading at a lower price-to-earnings ratio than Credit Acceptance, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
70.3% of Credit Acceptance shares are held by institutional investors. 0.4% of Santander Consumer USA shares are held by company insiders. Comparatively, 5.8% of Credit Acceptance shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk & Volatility
Santander Consumer USA has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, Credit Acceptance has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.
Summary
Credit Acceptance beats Santander Consumer USA on 9 of the 16 factors compared between the two stocks.
Santander Consumer USA Company Profile
Santander Consumer USA Holdings Inc. is the holding company for Santander Consumer USA Inc., and subsidiaries, a consumer finance company focused on vehicle finance and third party servicing. The Company operates through Consumer Finance segment. Its Consumer Finance business is focused on vehicle financial products and services, including retail installment contracts, vehicle leases, and dealer loans, as well as financial products and services related to motorcycles, recreational vehicles (RVs), and marine vehicles. It also includes its personal loan and point-of-sale financing operations. The Company’s primary business is the indirect origination and securitization of retail installment contracts, principally through manufacturer-franchised dealers in connection with their sale of new and used vehicles to retail consumers. The Company offers auto financing products and services to Fiat Chrysler Automobiles US LLC (FCA) customers and dealers under the Chrysler Capital brand.
Credit Acceptance Company Profile
Credit Acceptance Corporation provides financing programs, and related products and services to independent and franchised automobile dealers in the United States. The company advances money to dealers in exchange for the right to service the underlying consumer loans; and buys the consumer loans from the dealers and keeps various amounts 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. Credit Acceptance Corporation was founded in 1972 and is headquartered in Southfield, Michigan.
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