Reviewing Bread Financial (NYSE:BFH) and Lufax (NYSE:LU)

Lufax (NYSE:LU) and Bread Financial (NYSE:BFH) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Insider and Institutional Ownership

69.1% of Lufax shares are held by institutional investors. Comparatively, 99.5% of Bread Financial shares are held by institutional investors. 0.9% of Bread Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Lufax has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Bread Financial has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500.

Profitability

This table compares Lufax and Bread Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lufax	N/A	N/A	N/A
Bread Financial	10.08%	15.97%	2.27%

Valuation and Earnings

This table compares Lufax and Bread Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lufax	$4.82 billion	0.49	$125.31 million	($0.77)	-3.56
Bread Financial	$3.80 billion	0.75	$277.00 million	$9.82	6.38

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Lufax and Bread Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lufax	2	0	0	0	1.00
Bread Financial	3	8	3	1	2.13

Bread Financial has a consensus price target of $70.00, suggesting a potential upside of 11.77%. Given Bread Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Bread Financial is more favorable than Lufax.

Summary

Bread Financial beats Lufax on 14 of the 15 factors compared between the two stocks.

About Lufax

Lufax Holding Ltd operates as a financial service empowering institution for small and micro businesses in China. The company offers loan products, including general unsecured loans and secured loans, as well as consumer finance loans. It also provides wealth management products, such as asset management plans, mutual fund products, private investment fund products, and trust products. The company was founded in 2005 and is headquartered in Shanghai, China.

About Bread Financial

Bread Financial Holdings, Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for private label and co-brand credit card programs, as well as through Bread partnerships; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs, and installment loans and split-pay products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products. It offers its products under the Bread CashbackTM, Bread PayTM, and Bread SavingsTM brands. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings, Inc. in March 2022. Bread Financial Holdings, Inc. was incorporated in 1995 and is headquartered in Columbus, Ohio.