Head-to-Head Review: Houlihan Lokey (NYSE:HLI) vs. B. Riley Financial (NASDAQ:RILY)
Houlihan Lokey (NYSE: HLI – Get a rating) and B. Riley Financial (NASDAQ:RILY – Get a rating) are both finance companies, but which company is superior? We’ll compare the two companies based on earnings strength, profitability, valuation, institutional ownership, analyst recommendations, risk and dividends.
Houlihan Lokey pays an annual dividend of $1.72 per share and has a dividend yield of 2.1%. B. Riley Financial pays an annual dividend of $4.00 per share and has a dividend yield of 8.1%. Houlihan Lokey pays 26.8% of its profits as a dividend. B. Riley Financial pays 67.6% of its earnings as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Houlihan Lokey has increased its dividend for 7 consecutive years.
This is a summary of current recommendations and price targets for Houlihan Lokey and B. Riley Financial, as reported by MarketBeat.com.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|B. Riley Financial||0||0||0||0||N / A|
Houlihan Lokey currently has a consensus price target of $101.60, indicating a potential upside of 22.35%. Given Houlihan Lokey’s likely higher upside, stock analysts clearly believe that Houlihan Lokey is more favorable than B. Riley Financial.
Valuation and benefits
This chart compares the revenue, earnings per share (EPS), and valuation of Houlihan Lokey and B. Riley Financial.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Houlihan Lokey||$2.27 billion||2.47||$312.77 million||$6.41||13.01|
|B. Riley Financial||$1.74 billion||0.79||$445.05 million||$5.92||8.32|
B. Riley Financial has lower revenues, but higher profits than Houlihan Lokey. B. Riley Financial is trading at a lower price-to-earnings ratio than Houlihan Lokey, indicating that it is currently the more affordable of the two stocks.
This table compares the net margins, return on equity and return on assets of Houlihan Lokey and B. Riley Financial.
|Net margins||Return on equity||return on assets|
|B. Riley Financial||13.40%||26.88%||3.87%|
Risk and Volatility
Houlihan Lokey has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. In comparison, B. Riley Financial has a beta of 1.78, indicating that its stock price its stock is 78% more volatile than the S&P 500.
Insider and Institutional Ownership
74.3% of Houlihan Lokey shares are held by institutional investors. By comparison, 59.1% of B. Riley Financial’s shares are held by institutional investors. 26.0% of Houlihan Lokey’s stock is held by insiders of the company. By comparison, 27.3% of B. Riley Financial’s stock is held by insiders of the company. Strong institutional ownership indicates that large fund managers, hedge funds, and endowments believe a stock will outperform the market over the long term.
Houlihan Lokey beats B. Riley Financial on 12 out of 16 factors compared between the two stocks.
Company Profile Houlihan Lokey (Get a rating)
Houlihan Lokey, Inc., an investment banking firm, provides mergers and acquisitions (M&A), capital markets, financial restructuring, and financial advisory and valuation services worldwide. It operates in three segments: Corporate Finance, Financial Restructuring and Financial and Valuation Advisory. The Corporate Finance segment offers general financial advisory services; and advises public and private institutions on buy and sell transactions, leveraged loans, private mezzanine debt, high yield debt, initial public offerings, follow-on transactions, convertibles, placements private equity, private equity and liability management operations, as well as financial sponsors on various transactions. It also provides financing solutions and capital raising advisory services for public and multinational companies, financial sponsors and private companies. The Financial Restructuring segment advises debtors, creditors and other interested parties regarding recapitalization/deleveraging transactions. He also provides a range of advisory services, including structuring, negotiating and confirming reorganization plans; structuring and analysis of exchange offers; assessment of business viability; dispute resolution and expert testimony; and obtaining financing from the debtor in possession. The Financial Advisory and Valuation segment offers valuations of various assets, such as companies, illiquid debt and equity securities and intellectual property. He also provides equity opinions in connection with mergers and acquisitions and other transactions, and solvency opinions in connection with corporate spin-offs and dividend recapitalizations; and other types of financial opinions. In addition, this segment offers dispute resolution consulting services. It serves corporations, financial sponsors and government agencies. The company was founded in 1972 and is based in Los Angeles, California.
B. Riley Financial Company Profile (Get a rating)
B. Riley Financial, Inc., through its subsidiaries, provides investment banking and financial services to corporations, institutions and high net worth clients in North America, Australia and Europe. The Company operates in six segments: Capital Markets, Wealth Management, Auctions & Liquidation, Financial Advisory, Principal Investments-Communications and Brands. Capital Markets segments provide investment banking, corporate finance, financial advisory, research, securities lending and sales, and trading; mergers and acquisitions, restructuring advisory, initial and secondary public offerings and institutional private placement services; asset management services; and trades equity securities. The Wealth Management segment provides wealth management and tax services. The Auction and Liquidation segment offers retail and wholesale store liquidation and industrial asset disposal services. The Financial Consulting segment provides bankruptcy, forensic accounting, litigation support, operations management and real estate advisory services, as well as valuation and valuation services. The Major Investments-Communications segment provides consumer Internet access through United Online under the NetZero and Juno brands; VoIP communication and related products, and subscription services via magicJack; and mobile phone services and devices through Marconi Wireless. The Brands segments provide licenses for a portfolio of brand investments, including Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore. It also offers consulting services; brokerage services; senior secured loans and junior secured loans to middle market US public and private companies; and advisory services. The company was formerly known as Great American Group, Inc. and changed its name to B. Riley Financial, Inc. in November 2014. The company was founded in 1973 and is headquartered in Los Angeles, California. .
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