Critical Review: Burford Capital (NYSE:BUR) vs. Bakkt (NYSE:BKKT)

Burford Capital (NYSE:BUR) and Bakkt (NYSE:BKKT) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of recent recommendations for Burford Capital and Bakkt, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burford Capital	0	0	3	0	3.00
Bakkt	0	0	0	0	0.00

Burford Capital presently has a consensus target price of $19.50, indicating a potential upside of 63.54%. Given Burford Capital’s stronger consensus rating and higher probable upside, analysts clearly believe Burford Capital is more favorable than Bakkt.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Burford Capital	34.81%	8.07%	4.28%
Bakkt	-2.84%	-62.65%	-5.94%

Insider & Institutional Ownership

11.1% of Bakkt shares are owned by institutional investors. 0.2% of Burford Capital shares are owned by insiders. Comparatively, 1.8% of Bakkt shares are owned by 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.

Risk and Volatility

Burford Capital has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, Bakkt has a beta of 5.47, indicating that its stock price is 447% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burford Capital	$341.23 million	7.67	$610.52 million	$0.65	18.34
Bakkt	$3.49 billion	0.03	-$74.85 million	($7.93)	-1.02

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

Summary

Burford Capital beats Bakkt on 10 of the 14 factors compared between the two stocks.

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 Bakkt

Bakkt Holdings, Inc. offers software as a service and application programming interface solutions for crypto and loyalty, powering engagement, and performance. The company operates Bakkt Marketplace, a platform that enables consumers to buy, sell, and store crypto in an embedded web experience; Bakkt Crypto, a platform that supports clients with a range of crypto solutions; and Bakkt Trust, institutional-grade qualified custody solution for market participants. Its platform also offers a range of loyalty solutions, including redemption solutions for various rewards categories comprising travel, gift cards, and merchandise; travel solutions that offer a retail e-commerce booking platform, as well as live-agent booking and servicing; and unified shopping experience. The company was founded in 2018 and is headquartered in Alpharetta, Georgia.