Head to Head Analysis: First Cash (FCFS) vs. TPG RE Finance Trust (TRTX)

First Cash (NYSE: FCFS) and TPG RE Finance Trust (NYSE:TRTX) are both financials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for First Cash and TPG RE Finance Trust, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Cash 0 2 5 0 2.71
TPG RE Finance Trust 0 2 3 0 2.60

First Cash presently has a consensus target price of $64.00, indicating a potential downside of 5.54%. TPG RE Finance Trust has a consensus target price of $21.20, indicating a potential upside of 9.00%. Given TPG RE Finance Trust’s higher possible upside, analysts plainly believe TPG RE Finance Trust is more favorable than First Cash.

Insider & Institutional Ownership

95.7% of First Cash shares are owned by institutional investors. Comparatively, 26.4% of TPG RE Finance Trust shares are owned by institutional investors. 2.8% of First Cash shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares First Cash and TPG RE Finance Trust’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Cash $1.09 billion 2.94 $60.12 million $2.33 29.08
TPG RE Finance Trust $92.39 million 12.55 $69.96 million $1.47 13.23

TPG RE Finance Trust has lower revenue, but higher earnings than First Cash. TPG RE Finance Trust is trading at a lower price-to-earnings ratio than First Cash, indicating that it is currently the more affordable of the two stocks.

Dividends

First Cash pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. TPG RE Finance Trust pays an annual dividend of $0.33 per share and has a dividend yield of 1.7%. First Cash pays out 34.3% of its earnings in the form of a dividend. TPG RE Finance Trust pays out 22.4% 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. TPG RE Finance Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares First Cash and TPG RE Finance Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Cash 6.41% 8.45% 5.91%
TPG RE Finance Trust N/A N/A N/A

Summary

First Cash beats TPG RE Finance Trust on 9 of the 14 factors compared between the two stocks.

First Cash Company Profile

FirstCash, Inc., formerly First Cash Financial Services, Inc., is an operator of retail-based pawn stores in the United States and Latin America. The Company’s primary business is the operation of full-service pawn stores, which make small pawn loans secured by personal property, such as consumer electronics, jewelry, power tools, household appliances, sporting goods and musical instruments. The Company’s operates through two segments: the U.S. operations segment and the Latin America operations segment. The U.S. operations segment consists of all pawn and consumer loan operations in the United States and the Latin America operations segment consists of all pawn and consumer loan operations in Latin America, which includes operations in Mexico, Guatemala and El Salvador. In addition, some of the Company’s pawn stores offer small unsecured consumer loans or credit services products. The Company also operates consumer finance stores in Texas and Mexico.

TPG RE Finance Trust Company Profile

TPG RE Finance Trust, Inc. is a commercial real estate finance company. The Company is engaged in originating, acquiring and managing commercial mortgage loans and other commercial real estate-related debt instruments. It focuses primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high quality commercial real estate properties undergoing some form of transition and value creation, such as re-tenanting, refurbishment or other form of repositioning. As of December 31, 2016, the Company’s portfolio consisted of 54 first mortgage loans. As of December 31, 2016, 97% of the loan commitments in its portfolio consisted of floating rate loans, and 98.6% of the loan commitments in its portfolio consisted of first mortgage loans.

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