Burford Capital (NYSE:BUR) & Freedom (NASDAQ:FRHC) Financial Analysis

Burford Capital (NYSE:BUR) and Freedom (NASDAQ:FRHC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Burford Capital and Freedom, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burford Capital	2	0	3	0	2.20
Freedom	1	0	0	0	1.00

Burford Capital presently has a consensus target price of $12.00, suggesting a potential upside of 130.28%. Freedom has a consensus target price of $138.00, suggesting a potential upside of 0.00%. Given Burford Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Burford Capital is more favorable than Freedom.

Risk & Volatility

Burford Capital has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Freedom has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Profitability

This table compares Burford Capital and Freedom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burford Capital	15.14%	1.97%	0.97%
Freedom	0.13%	0.21%	0.03%

Earnings and Valuation

This table compares Burford Capital and Freedom”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burford Capital	$413.36 million	2.76	$62.57 million	$0.27	19.30
Freedom	$2.05 billion	4.12	$84.65 million	$0.02	6,900.00

Freedom has higher revenue and earnings than Burford Capital. Burford Capital is trading at a lower price-to-earnings ratio than Freedom, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

1.3% of Freedom shares are owned by institutional investors. 8.9% of Burford Capital shares are owned by company insiders. Comparatively, 70.0% of Freedom shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Burford Capital beats Freedom on 8 of the 14 factors compared between the two stocks.

About Burford Capital

Burford Capital Limited provides legal finance products and services worldwide. The company operates through two segments, Capital Provision, and Asset Management and Other Provision. The Capital Provision segment provides capital to the legal industry or in connection with legal matters directly and through investment in private funds; legal risk management services; lower risk legal finance business focusing on pre-settlement litigation matters with lower risk and lower expected returns; post-settlement finance; and complex strategies in which it acts as a principal and acquires assets that are mispriced. The Asset Management and Other Services segment provides services to the legal industry, including litigation insurance. Burford Capital Limited was incorporated in 2009 and is based in Saint Peter Port, Guernsey.

About Freedom

Freedom Holding Corp., through its subsidiaries, provides securities brokerage, securities dealing, market making, investment research, investment counseling, and investment banking services. It offers retail brokerage services for exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, exchange traded options and futures contracts, government bonds, and mutual funds; securities trading; underwriting services; margin lending services collateralized by securities and cash in the customer’s account; various investment education and training courses; investment research services; and commercial banking services, including payment cards, digital mortgages, and digital business and digital auto loans, as well as Freedom Box, a package of payment acquiring services. The company also provides capital raising solutions for corporate clients through initial public offerings and follow-on offerings; and debt capital markets solutions that focuses on structuring and distributing private and public debt for various purposes, including buyouts, acquisitions, growth capital financings, and recapitalizations, as well as information processing services. In addition, it facilitates repurchase and reverse repurchase agreements in proprietary trading activities; and covers short positions and settle other securities obligations to accommodate customers’ needs and finance its inventory positions. Further, the company offers proprietary trading and investment services, as well as insurance products; and Tradernet software platform for client margin risk evaluation and middle office security transfer requests. It operates in Central Asia, Eastern Europe, rest of Europe, the United States, Russia, the Middle East, and Caucasus. The company was formerly known as BMB Munai, Inc. and changed its name to Freedom Holding Corp. Freedom Holding Corp. was incorporated in 1981 and is headquartered in Almaty, Kazakhstan.