Head to Head Contrast: Bread Financial (NYSE:BFH) versus World Acceptance (NASDAQ:WRLD)

Bread Financial (NYSE:BFH) and World Acceptance (NASDAQ:WRLD) are both business services companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations and price targets for Bread Financial and World Acceptance, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bread Financial	4	7	3	0	1.93
World Acceptance	2	0	0	0	1.00

Bread Financial currently has a consensus price target of $39.17, indicating a potential downside of 4.03%. World Acceptance has a consensus price target of $56.00, indicating a potential downside of 59.80%. Given Bread Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe Bread Financial is more favorable than World Acceptance.

Insider & Institutional Ownership

99.5% of Bread Financial shares are held by institutional investors. Comparatively, 83.6% of World Acceptance shares are held by institutional investors. 0.6% of Bread Financial shares are held by company insiders. Comparatively, 40.9% of World Acceptance shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Bread Financial has a beta of 1.92, indicating that its stock price is 92% more volatile than the S&P 500. Comparatively, World Acceptance has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500.

Valuation & Earnings

This table compares Bread Financial and World Acceptance’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bread Financial	$5.17 billion	0.39	$718.00 million	$7.94	5.14
World Acceptance	$573.21 million	1.48	$21.23 million	$13.26	10.50

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bread Financial	8.08%	14.44%	1.88%
World Acceptance	13.49%	18.88%	7.04%

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.

About World Acceptance

World Acceptance Corporation engages in consumer finance business in the United States. The company offers short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It also provides income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.