B. Riley Financial (NASDAQ:RILY – Get Rating) and Zhihu (NYSE:ZH – Get Rating) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.
Earnings and Valuation
This table compares B. Riley Financial and Zhihu’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|B. Riley Financial||$1.74 billion||0.89||$445.05 million||$15.16||3.73|
|Zhihu||$464.38 million||2.67||-$203.82 million||($0.78)||-2.83|
B. Riley Financial has higher revenue and earnings than Zhihu. Zhihu is trading at a lower price-to-earnings ratio than B. Riley Financial, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for B. Riley Financial and Zhihu, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|B. Riley Financial||0||0||0||0||N/A|
Zhihu has a consensus price target of $9.48, suggesting a potential upside of 329.11%. Given Zhihu’s higher probable upside, analysts clearly believe Zhihu is more favorable than B. Riley Financial.
This table compares B. Riley Financial and Zhihu’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|B. Riley Financial||25.57%||62.06%||9.67%|
Insider and Institutional Ownership
59.7% of B. Riley Financial shares are held by institutional investors. Comparatively, 16.6% of Zhihu shares are held by institutional investors. 27.3% of B. Riley Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
B. Riley Financial beats Zhihu on 9 of the 12 factors compared between the two stocks.
About B. Riley Financial (Get Rating)
B. Riley Financial, Inc., through its subsidiaries, provides investment banking and financial services to corporate, institutional, and high net worth clients in North America, Australia, and Europe. The company operates in six segments: Capital Markets, Wealth Management, Auction and Liquidation, Financial Consulting, Principal InvestmentsÂ-Communications, and Brands. The Capital Markets segments offers investment banking, corporate finance, financial advisory, research, securities lending and sales, and trading services; merger and acquisitions, restructuring advisory, initial and secondary public offerings, and institutional private placements services; asset management services; and trades in equity securities. The Wealth Management segment provides wealth management and tax services. The Auction and Liquidation Segment offers retail store liquidation, and wholesale and industrial assets disposition services. The Financial Consulting segment provides bankruptcy, forensic accounting, litigation support, operations management and real estate consulting, and valuation and appraisal services. The Principal InvestmentsÂ-Communications segment provides consumer Internet access through United Online under the NetZero and Juno brands; VoIP communication and related products, and subscription services through magicJack; and mobile phone services and devices through Marconi Wireless. The Brands segments provides licensing of a brand investment portfolio, including Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too, and Nanette Lepore. It also offers advisory services; brokerage services; senior secured and second lien secured loans to middle market public and the private U.S. companies; and consulting 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.
About Zhihu (Get Rating)
Zhihu Inc. operates an online content community platform in the People’s Republic of China. The company’s community allows people to seek inspiration, find solutions, make decisions, and have fun. It also offers technology, business support, and consulting services; information and marketing services; and Internet services. The company was founded in 2011 and is based in Beijing, China.
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