Burford Capital (NYSE:BUR – Get Free Report) and Equitable (NYSE:EQH – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.
Profitability
This table compares Burford Capital and Equitable’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Burford Capital | 15.14% | 10.24% | 4.35% |
| Equitable | -8.72% | 511.35% | 0.61% |
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Burford Capital and Equitable, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Burford Capital | 2 | 2 | 2 | 0 | 2.00 |
| Equitable | 1 | 2 | 10 | 1 | 2.79 |
Dividends
Burford Capital pays an annual dividend of $0.12 per share and has a dividend yield of 2.7%. Equitable pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. Burford Capital pays out -1.6% of its earnings in the form of a dividend. Equitable pays out -36.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Equitable has increased its dividend for 2 consecutive years.
Earnings and Valuation
This table compares Burford Capital and Equitable”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Burford Capital | $413.36 million | 2.32 | $62.57 million | ($7.71) | -0.57 |
| Equitable | $11.66 billion | 1.24 | -$1.38 billion | ($3.31) | -16.02 |
Burford Capital has higher earnings, but lower revenue than Equitable. Equitable is trading at a lower price-to-earnings ratio than Burford Capital, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
92.7% of Equitable shares are owned by institutional investors. 8.9% of Burford Capital shares are owned by insiders. Comparatively, 1.0% of Equitable shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Burford Capital has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Equitable has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.
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 Equitable
Equitable Holdings, Inc., together with its consolidated subsidiaries, operates as a diversified financial services company worldwide. The company operates through six segments: Individual Retirement, Group Retirement, Investment Management and Research, Protection Solutions, Wealth Management, and Legacy. The Individual Retirement segment offers a suite of variable annuity products primarily to affluent and high net worth individuals. The Group Retirement segment provides tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. The Investment Management and Research segment offers diversified investment management, research, and related services to various clients through institutional. The Protection Solutions segment provides life insurance products, such as VUL insurance and IUL insurance, term life, and employee benefits business, such as dental, vision, life, as well as short- and long-term disability insurance products to small and medium-sized businesses. The Wealth Management segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products. The Legacy segment consists of the capital intensive fixed-rate GMxB business that includes ROP death benefits. The company was formerly known as AXA Equitable Holdings, Inc. and changed its name to Equitable Holdings, Inc. in January 2020. Equitable Holdings, Inc. was founded in 1859 and is based in New York, New York.
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