Moelis & Company (NYSE:MC) & B. Riley Financial (NASDAQ:RILY) Critical Comparison

B. Riley Financial (NASDAQ:RILY) and Moelis & Company (NYSE:MC) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Earnings and Valuation

This table compares B. Riley Financial and Moelis & Company”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
B. Riley Financial	$1.13 billion	0.13	$307.42 million	$12.70	0.29
Moelis & Company	$1.52 billion	2.97	$233.04 million	$2.87	20.04

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

Analyst Recommendations

This is a summary of recent ratings and target prices for B. Riley Financial and Moelis & Company, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
B. Riley Financial	1	0	0	0	1.00
Moelis & Company	0	6	2	0	2.25

Moelis & Company has a consensus target price of $68.83, suggesting a potential upside of 19.70%. Given Moelis & Company’s stronger consensus rating and higher possible upside, analysts plainly believe Moelis & Company is more favorable than B. Riley Financial.

Dividends

B. Riley Financial pays an annual dividend of $2.00 per share and has a dividend yield of 54.9%. Moelis & Company pays an annual dividend of $2.60 per share and has a dividend yield of 4.5%. B. Riley Financial pays out 15.7% of its earnings in the form of a dividend. Moelis & Company pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Moelis & Company has raised its dividend for 1 consecutive years. B. Riley Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

B. Riley Financial has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Moelis & Company has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500.

Institutional & Insider Ownership

50.2% of B. Riley Financial shares are owned by institutional investors. Comparatively, 91.5% of Moelis & Company shares are owned by institutional investors. 27.8% of B. Riley Financial shares are owned by company insiders. Comparatively, 6.3% of Moelis & Company shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares B. Riley Financial and Moelis & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
B. Riley Financial	35.88%	39,260.09%	22.99%
Moelis & Company	14.50%	39.59%	17.04%

Summary

Moelis & Company beats B. Riley Financial on 9 of the 17 factors compared between the two stocks.

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.

About Moelis & Company

Moelis & Co. operates as a holding company. It engages in the provision of financial advisory, capital raising and asset management services to a client base including corporations, governments, sovereign wealth funds and financial sponsors. The firm focuses on clients including large public multinational corporations, middle market private companies, financial sponsors, entrepreneurs and governments. The company was founded by Kenneth David Moelis, Navid Mahmoodzadegan, Jeffrey Raich and Elizabeth Ann Crain in July 2007 and is headquartered in New York, NY.