Credit Acceptance (NASDAQ:CACC) & Bread Financial (NYSE:BFH) Head to Head Comparison

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

Risk & Volatility

Credit Acceptance has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500. Comparatively, Bread Financial has a beta of 1.94, suggesting that its stock price is 94% more volatile than the S&P 500.

Insider & Institutional Ownership

66.2% of Credit Acceptance shares are held by institutional investors. Comparatively, 99.5% of Bread Financial shares are held by institutional investors. 4.2% of Credit Acceptance shares are held by company insiders. Comparatively, 0.2% of Bread Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Credit Acceptance and Bread Financial’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Credit Acceptance	$1.90 billion	3.58	$286.10 million	$22.02	25.16
Bread Financial	$5.17 billion	0.34	$718.00 million	$14.32	2.49

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Credit Acceptance	15.04%	30.94%	7.30%
Bread Financial	13.87%	26.24%	3.34%

Analyst Recommendations

This is a breakdown of current recommendations for Credit Acceptance and Bread Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Credit Acceptance	1	2	0	0	1.67
Bread Financial	4	7	1	0	1.75

Credit Acceptance presently has a consensus price target of $381.75, suggesting a potential downside of 31.11%. Bread Financial has a consensus price target of $35.00, suggesting a potential downside of 1.66%. Given Bread Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Bread Financial 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 Bread Financial

Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for private label and co-brand credit card programs, as well as through Bread partnerships; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs, and installment loans and split-pay products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products. It offers its products under the Bread CashbackTM, Bread PayTM, and Bread SavingsTM brands. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was incorporated in 1995 and is headquartered in Columbus, Ohio.