Head-To-Head Review: Dave (NASDAQ:DAVE) vs. Bread Financial (NYSE:BFH)

Dave (NASDAQ:DAVE) and Bread Financial (NYSE:BFH) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, valuation, earnings and dividends.

Insider & Institutional Ownership

18.0% of Dave shares are held by institutional investors. Comparatively, 99.5% of Bread Financial shares are held by institutional investors. 23.6% of Dave shares are held by company insiders. Comparatively, 1.3% of Bread Financial shares are held 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.

Earnings & Valuation

This table compares Dave and Bread Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dave	$643.65 million	7.32	$195.87 million	$15.42	23.96
Bread Financial	$4.70 billion	0.83	$518.00 million	$12.82	7.91

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

Analyst Recommendations

This is a summary of current ratings and price targets for Dave and Bread Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dave	0	3	14	0	2.82
Bread Financial	1	7	8	0	2.44

Dave currently has a consensus price target of $433.25, indicating a potential upside of 17.29%. Bread Financial has a consensus price target of $112.29, indicating a potential upside of 10.76%. Given Dave’s stronger consensus rating and higher possible upside, analysts clearly believe Dave is more favorable than Bread Financial.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dave	34.58%	77.46%	40.44%
Bread Financial	11.95%	18.42%	2.76%

Volatility & Risk

Dave has a beta of 3.92, meaning that its stock price is 292% more volatile than the S&P 500. Comparatively, Bread Financial has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Summary

Dave beats Bread Financial on 11 of the 14 factors compared between the two stocks.

About Dave

Dave, Inc. is a digital banking service. Its products include a budgeting tool to help members manage their upcoming bills to avoid overspending, cash advances through its flagship ExtraCash product to help members avoid punitive overdraft fees, a Side Hustle product, where Dave helps connect members with supplemental work opportunities, and Dave Banking, a modern checking account experience with valuable tools for building long-term financial health. The company was founded by Jason Wilk, Paras Chitrakar, and John Wolanin in October 2015 and is headquartered in Los Angeles, CA.

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.