Contrasting Heritage Global (NASDAQ:HGBL) and Fair Isaac (NYSE:FICO)

Heritage Global (NASDAQ:HGBL) and Fair Isaac (NYSE:FICO) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Profitability

This table compares Heritage Global and Fair Isaac’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Global	31.81%	37.24%	25.72%
Fair Isaac	28.43%	-51.26%	26.35%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Heritage Global and Fair Isaac, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Global	0	0	2	0	3.00
Fair Isaac	0	2	6	0	2.75

Heritage Global currently has a consensus target price of $5.25, indicating a potential upside of 72.70%. Fair Isaac has a consensus target price of $901.63, indicating a potential upside of 1.27%. Given Heritage Global’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Heritage Global is more favorable than Fair Isaac.

Institutional & Insider Ownership

27.1% of Heritage Global shares are owned by institutional investors. Comparatively, 85.2% of Fair Isaac shares are owned by institutional investors. 12.0% of Heritage Global shares are owned by company insiders. Comparatively, 3.4% of Fair Isaac shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Heritage Global has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, Fair Isaac has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Valuation and Earnings

This table compares Heritage Global and Fair Isaac’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Global	$56.20 million	2.01	$15.49 million	$0.48	6.33
Fair Isaac	$1.38 billion	16.10	$373.54 million	$16.47	54.06

Fair Isaac has higher revenue and earnings than Heritage Global. Heritage Global is trading at a lower price-to-earnings ratio than Fair Isaac, indicating that it is currently the more affordable of the two stocks.

Summary

Fair Isaac beats Heritage Global on 8 of the 14 factors compared between the two stocks.

About Heritage Global

Heritage Global Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company provides market making, acquisitions, refurbishment, dispositions, valuations, and secured lending services. It focuses on identifying, valuing, acquiring, and monetizing underlying tangible and intangible assets. Heritage Global Inc. acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; charged-off receivable portfolios; and business enterprises. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was incorporated in 1983 and is headquartered in San Diego, California.

About Fair Isaac

Fair Isaac Corporation develops analytic, software, and data decisioning technologies and services that enable businesses to automate, enhance, and connect decisions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Scores and Software. The Software segment provides pre-configured analytic and decision management solution designed for various business needs or processes, such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance, and marketing, as well as associated professional services. This segment also offers FICO Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by customers to address a wide range of business use cases. The Scores segment provides business-to-business scoring solutions and services for consumers that give clients access to predictive credit and other scores that can be integrated into their transaction streams and decision-making processes, as well as business-to-consumer scoring solutions comprising myFICO.com subscription offerings. Fair Isaac Corporation markets its products and services primarily through its direct sales organization and indirect channels, as well as online. The company was formerly known as Fair Isaac & Company, Inc. and changed its name to Fair Isaac Corporation in July 1992. Fair Isaac Corporation was founded in 1956 and is headquartered in Bozeman, Montana.