Heritage Global (NASDAQ:HGBL – Get Free Report) and Freedom (NASDAQ:FRHC – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.
Institutional & Insider Ownership
33.5% of Heritage Global shares are owned by institutional investors. Comparatively, 1.3% of Freedom shares are owned by institutional investors. 15.6% of Heritage Global shares are owned by company insiders. Comparatively, 69.8% 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 is poised for long-term growth.
Earnings & Valuation
This table compares Heritage Global and Freedom”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Heritage Global | $50.98 million | 0.85 | $3.59 million | ($0.41) | -3.05 |
| Freedom | $2.19 billion | 5.25 | $153.33 million | $2.53 | 71.30 |
Freedom has higher revenue and earnings than Heritage Global. Heritage Global is trading at a lower price-to-earnings ratio than Freedom, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for Heritage Global and Freedom, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Heritage Global | 1 | 0 | 1 | 0 | 2.00 |
| Freedom | 0 | 2 | 1 | 0 | 2.33 |
Heritage Global currently has a consensus target price of $3.00, indicating a potential upside of 140.00%. Freedom has a consensus target price of $159.00, indicating a potential downside of 11.86%. Given Heritage Global’s higher probable upside, analysts clearly believe Heritage Global is more favorable than Freedom.
Profitability
This table compares Heritage Global and Freedom’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Heritage Global | -29.63% | 6.12% | 4.69% |
| Freedom | 6.47% | 10.96% | 1.24% |
Risk & Volatility
Heritage Global has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500. Comparatively, Freedom has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.
Summary
Freedom beats Heritage Global on 10 of the 13 factors compared between the two stocks.
About Heritage Global
Heritage Global Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company operates in three segments: Auction and Liquidation, Refurbishment & Resale, and Brokerage. It provides a suite of market making, acquisitions, refurbishment, dispositions, valuations, and secured lending services. The company focuses on identifying, valuing, acquiring, and monetizing underlying tangible assets. It acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; and charged-off receivable portfolios. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was founded in 1937 and is headquartered in San Diego, California.
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.
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