Critical Review: B. Riley Financial (RILY) versus Its Peers
B. Riley Financial (NASDAQ: RILY) is one of 99 publicly-traded companies in the “Business Support Services” industry, but how does it compare to its competitors? We will compare B. Riley Financial to similar businesses based on the strength of its earnings, dividends, institutional ownership, risk, valuation, profitability and analyst recommendations.
This table compares B. Riley Financial and its competitors’ 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%|
|B. Riley Financial Competitors||-19.24%||-19.80%||1.17%|
46.3% of B. Riley Financial shares are owned by institutional investors. Comparatively, 62.4% of shares of all “Business Support Services” companies are owned by institutional investors. 30.9% of B. Riley Financial shares are owned by insiders. Comparatively, 12.7% of shares of all “Business Support Services” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current recommendations and price targets for B. Riley Financial and its competitors, 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|
|B. Riley Financial Competitors||730||2059||2832||71||2.39|
As a group, “Business Support Services” companies have a potential upside of 4.64%. Given B. Riley Financial’s competitors higher probable upside, analysts plainly believe B. Riley Financial has less favorable growth aspects than its competitors.
Valuation and Earnings
This table compares B. Riley Financial and its competitors gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Net Income||Price/Earnings Ratio|
|B. Riley Financial||$190.35 million||$21.52 million||12.62|
|B. Riley Financial Competitors||$1.31 billion||$101.30 million||1,293.45|
B. Riley Financial’s competitors have higher revenue and earnings than B. Riley Financial. B. Riley Financial is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.
B. Riley Financial pays an annual dividend of $0.32 per share and has a dividend yield of 1.7%. B. Riley Financial pays out 21.2% of its earnings in the form of a dividend. As a group, “Business Support Services” companies pay a dividend yield of 1.1% and pay out 26.3% of their earnings in the form of a dividend. B. Riley Financial is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.
Risk & Volatility
B. Riley Financial has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, B. Riley Financial’s competitors have a beta of 1.08, suggesting that their average share price is 8% more volatile than the S&P 500.
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.
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