Critical Analysis: AllianceBernstein (NYSE:AB) and B. Riley Financial (NASDAQ:RILY)

AllianceBernstein (NYSE:ABGet Rating) and B. Riley Financial (NASDAQ:RILYGet Rating) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Dividends

AllianceBernstein pays an annual dividend of $2.56 per share and has a dividend yield of 6.6%. B. Riley Financial pays an annual dividend of $4.00 per share and has a dividend yield of 10.0%. AllianceBernstein pays out 75.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. B. Riley Financial pays out -211.6% of its earnings in the form of a dividend. B. Riley Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

AllianceBernstein has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, B. Riley Financial has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.

Insider & Institutional Ownership

11.5% of AllianceBernstein shares are held by institutional investors. Comparatively, 45.7% of B. Riley Financial shares are held by institutional investors. 2.7% of AllianceBernstein shares are held by company insiders. Comparatively, 27.9% of B. Riley Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares AllianceBernstein and B. Riley Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AllianceBernstein $4.44 billion 0.88 $385.84 million $3.39 11.51
B. Riley Financial $1.74 billion 0.66 $445.05 million ($1.89) -21.24

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for AllianceBernstein and B. Riley Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AllianceBernstein 0 4 0 0 2.00
B. Riley Financial 0 0 0 0 N/A

AllianceBernstein presently has a consensus price target of $40.25, suggesting a potential upside of 3.13%. Given AllianceBernstein’s higher probable upside, analysts plainly believe AllianceBernstein is more favorable than B. Riley Financial.

Profitability

This table compares AllianceBernstein and B. Riley Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AllianceBernstein 7.75% 22.48% 21.05%
B. Riley Financial -3.78% 0.16% 0.02%

Summary

AllianceBernstein beats B. Riley Financial on 8 of the 14 factors compared between the two stocks.

About AllianceBernstein

(Get Rating)

AllianceBernstein Holding L.P. is publicly owned investment manager. The firm also provides research services to its clients. It provides its services to investment companies, pension and profit sharing plans, banks and thrift institutions, trusts, estates, government agencies, charitable organizations, individuals, corporations, and other business entities. The firm invests in public equity, fixed income, and alternative investment markets across the globe. It employs long/short strategy to make its investments. The firm conducts in-house research to make its investments. AllianceBernstein Holding L.P. was founded in 1987 and is based in New York, New York.

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 Investments-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 Investments-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.

Receive News & Ratings for AllianceBernstein Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for AllianceBernstein and related companies with MarketBeat.com's FREE daily email newsletter.