Burford Capital (NYSE:BUR) & BB Seguridade Participacoes (OTCMKTS:BBSEY) Critical Contrast

BB Seguridade Participacoes (OTCMKTS:BBSEY) and Burford Capital (NYSE:BUR) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, analyst recommendations, risk, valuation, institutional ownership and earnings.

Earnings and Valuation

This table compares BB Seguridade Participacoes and Burford Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BB Seguridade Participacoes	$1.89 billion	6.90	$1.61 billion	$0.81	8.04
Burford Capital	$546.09 million	3.65	$146.48 million	$0.38	23.93

BB Seguridade Participacoes has higher revenue and earnings than Burford Capital. BB Seguridade Participacoes is trading at a lower price-to-earnings ratio than Burford Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for BB Seguridade Participacoes and Burford Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BB Seguridade Participacoes	0	1	0	0	2.00
Burford Capital	2	0	2	0	2.00

Burford Capital has a consensus price target of $18.00, suggesting a potential upside of 97.91%. Given Burford Capital’s higher possible upside, analysts clearly believe Burford Capital is more favorable than BB Seguridade Participacoes.

Profitability

This table compares BB Seguridade Participacoes and Burford Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BB Seguridade Participacoes	87.16%	79.01%	43.03%
Burford Capital	18.42%	2.71%	1.37%

Institutional & Insider Ownership

0.0% of BB Seguridade Participacoes shares are held by institutional investors. 8.9% of Burford Capital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

BB Seguridade Participacoes has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500. Comparatively, Burford Capital has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Dividends

BB Seguridade Participacoes pays an annual dividend of $0.67 per share and has a dividend yield of 10.3%. Burford Capital pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. BB Seguridade Participacoes pays out 82.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Burford Capital pays out 31.6% of its earnings in the form of a dividend.

Summary

BB Seguridade Participacoes beats Burford Capital on 9 of the 15 factors compared between the two stocks.

About BB Seguridade Participacoes

BB Seguridade Participações S.A., through its subsidiaries operates in the insurance, pension plans, and bonds, businesses in Brazil. The company operates through Security and Brokerage segments. The Security segment offers life, property, rural, special risks and financial, transport, hulls, and housing people insurance products. It also offers pension plans, dental, and capitalization plans. The Brokerage segment engages in the brokerage, management, and promotion of pension plans, capitalization, capitalization, and dental plans. BB Seguridade Participações S.A. was incorporated in 2012 and is headquartered in Brasilia, Brazil. BB Seguridade Participações S.A. operates as a subsidiary of Banco do Brasil S.A.

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.