B. Riley Financial (NASDAQ: RILY) and Genpact (NYSE:G) are both business services companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.
Institutional and Insider Ownership
46.3% of B. Riley Financial shares are owned by institutional investors. Comparatively, 94.2% of Genpact shares are owned by institutional investors. 30.9% of B. Riley Financial shares are owned by company insiders. Comparatively, 1.4% of Genpact shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
B. Riley Financial pays an annual dividend of $0.32 per share and has a dividend yield of 1.7%. Genpact pays an annual dividend of $0.24 per share and has a dividend yield of 0.8%. B. Riley Financial pays out 21.2% of its earnings in the form of a dividend. Genpact pays out 17.9% 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.
Valuation & Earnings
This table compares B. Riley Financial and Genpact’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|B. Riley Financial||$190.35 million||2.59||$21.52 million||$1.51||12.35|
|Genpact||$2.74 billion||2.22||$263.11 million||$1.34||23.48|
Genpact has higher revenue and earnings than B. Riley Financial. B. Riley Financial is trading at a lower price-to-earnings ratio than Genpact, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for B. Riley Financial and Genpact, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|B. Riley Financial||0||0||0||0||N/A|
Genpact has a consensus target price of $34.61, indicating a potential upside of 10.02%. Given Genpact’s higher possible upside, analysts plainly believe Genpact is more favorable than B. Riley Financial.
This table compares B. Riley Financial and Genpact’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|B. Riley Financial||9.87%||17.98%||4.82%|
Volatility and Risk
B. Riley Financial has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Genpact has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.
Genpact beats B. Riley Financial on 9 of the 15 factors compared between the two stocks.
B. Riley Financial Company Profile
B. Riley Financial, Inc. is an independent investment bank. The Company’s segments include capital markets, auction and liquidation, valuation and appraisal, and Principal Investments-United Online. The capital markets segment provides an array of investment banking, corporate finance, research, wealth management, sales and trading services to corporate, institutional and high net worth clients. The auction and liquidation segment utilizes a scalable network of independent contractors and industry-specific advisors to tailor its services to the needs of a multitude of clients, logistical challenges and distressed circumstances. The valuation and appraisal segment provides valuation and appraisal services to financial institutions, lenders, private equity firms and other providers of capital. The principal investments-United Online segment consists of businesses, which has been acquired primarily for attractive investment return characteristics.
Genpact Company Profile
Genpact Limited is engaged in providing digitally powered business process management and services. The Company is also engaged in designing, transforming and running a combination of processes, as well as providing solutions that combine elements of its service offerings. The Company’s segments include Business process outsourcing and Information technology services. The Company offers various vertical activities, which include banking and financial services, capital markets, consumer product goods services, healthcare, infrastructure and manufacturing services, insurance and life sciences. In addition to these vertical activities, it also offers analytics and research, collections and customer services, consulting and transformation services, core industry operations services, enterprise application services, finance and accounting (F&A) services, information technology (IT) infrastructure management services, and supply chain and procurement services.
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