B. Riley Financial (NASDAQ:RILY) & Futu (NASDAQ:FUTU) Head to Head Review

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

Risk & Volatility

Futu has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, B. Riley Financial has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500.

Institutional & Insider Ownership

50.2% of B. Riley Financial shares are held by institutional investors. 35.2% of Futu shares are held by insiders. Comparatively, 27.8% of B. Riley Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for Futu and B. Riley Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Futu	0	4	2	0	2.33
B. Riley Financial	1	0	0	0	1.00

Futu currently has a consensus target price of $139.91, indicating a potential upside of 42.68%. Given Futu’s stronger consensus rating and higher possible upside, research analysts plainly believe Futu is more favorable than B. Riley Financial.

Dividends

Futu pays an annual dividend of $2.55 per share and has a dividend yield of 2.6%. B. Riley Financial pays an annual dividend of $2.00 per share and has a dividend yield of 51.2%. Futu pays out 25.2% of its earnings in the form of a dividend. B. Riley Financial pays out 53.3% 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.

Earnings & Valuation

This table compares Futu 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
Futu	$2.94 billion	4.68	$1.46 billion	$10.10	9.71
B. Riley Financial	$885.01 million	0.18	$307.42 million	$3.75	1.04

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Futu	42.95%	28.20%	4.40%
B. Riley Financial	8.83%	190.02%	4.62%

Summary

Futu beats B. Riley Financial on 11 of the 16 factors compared between the two stocks.

About Futu

Futu Holdings Ltd. is a financial technology company that provides digital brokerage and wealth management services. Its platforms include Futu NiuNiu and moomoo, which offer tools for investors to trade and manage investments. The company’s services include securities trading, market data and research, investment education, and online investor communities. Its brokerage platforms provide access to products such as stocks, exchange-traded funds, options, and other investment products, with availability varying by market.

About B. Riley Financial

B. Riley Financial, Inc. is a diversified financial services company that provides investment banking, institutional brokerage, wealth management, asset appraisal, valuation, liquidation and restructuring services. Through its businesses, the company works with public and private companies, institutional investors, private equity firms, financial institutions and individual clients. The company’s capital markets operations, including B. Riley Securities, offer investment banking, equity research, sales and trading, and related advisory services.