Financial Comparison: StepStone Group (NASDAQ:STEP) & B. Riley Financial (NASDAQ:RILY)

StepStone Group (NASDAQ:STEP) and B. Riley Financial (NASDAQ:RILY) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Insider & Institutional Ownership

55.5% of StepStone Group shares are owned by institutional investors. Comparatively, 50.2% of B. Riley Financial shares are owned by institutional investors. 15.7% of StepStone Group shares are owned by insiders. Comparatively, 27.8% of B. Riley Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

StepStone Group has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, B. Riley Financial has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for StepStone Group and B. Riley Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
StepStone Group	1	2	8	0	2.64
B. Riley Financial	1	0	0	0	1.00

StepStone Group currently has a consensus target price of $66.11, suggesting a potential upside of 48.97%. Given StepStone Group’s stronger consensus rating and higher possible upside, analysts clearly believe StepStone Group is more favorable than B. Riley Financial.

Valuation and Earnings

This table compares StepStone Group and B. Riley Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
StepStone Group	$1.99 billion	2.66	-$535.81 million	($7.72)	-5.75
B. Riley Financial	$967.60 million	0.16	$307.42 million	$12.70	0.30

B. Riley Financial has lower revenue, but higher earnings than StepStone Group. StepStone Group is trading at a lower price-to-earnings ratio than B. Riley Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares StepStone Group and B. Riley Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
StepStone Group	-30.53%	43.38%	4.40%
B. Riley Financial	35.88%	39,260.09%	22.99%

About StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.

About B. Riley Financial

B. Riley Financial, Inc., through its subsidiaries, provides financial services to corporate, institutional, and high net worth clients in North America, Australia, the Asia Pacific, and Europe. The company operates through six segments: Capital Markets, Wealth Management, Financial Consulting, Auction and Liquidation, Communications, and Consumer. The Capital Markets segments offers investment banking, equity research, institutional sales and trading, securities lending, fund and asset management, direct lending, venture capital, proprietary trading, and investment services; merger and acquisition, restructuring advisory, and recapitalization services; public and private equity offerings; and debt financing solutions. This segment also trades in equity securities. The Wealth Management segment provides wealth management and tax services. The Financial Consulting segment offers bankruptcy restructuring and turnaround management, forensic accounting and litigation support, valuation and appraisal, and real estate services. The Auction and Liquidation Segment provides auction and liquidation services. The Communications segment offers dial-up, mobile broadband and digital subscriber line services under the NetZero and Juno brands; cloud communication services; VoIP cloud-based technology and communication devices and subscription services through magicJack; and mobile phone voice, text, and data services and devices through Marconi Wireless. The Consumer segment sells laptop and computer accessories. The company was formerly known as Great American Group, Inc. and changed its name to B. Riley Financial, Inc. in November 2014. B. Riley Financial, Inc. was founded in 1973 and is headquartered in Los Angeles, California.