Bread Financial (NYSE:BFH) & Chicago Atlantic Real Estate Finance (NASDAQ:REFI) Critical Survey

Chicago Atlantic Real Estate Finance (NASDAQ:REFI) and Bread Financial (NYSE:BFH) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Profitability

This table compares Chicago Atlantic Real Estate Finance and Bread Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chicago Atlantic Real Estate Finance	64.78%	11.94%	8.55%
Bread Financial	10.08%	15.97%	2.27%

Volatility & Risk

Chicago Atlantic Real Estate Finance has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, Bread Financial has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Valuation and Earnings

This table compares Chicago Atlantic Real Estate Finance and Bread Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chicago Atlantic Real Estate Finance	$54.95 million	4.75	$37.04 million	$1.69	7.33
Bread Financial	$4.80 billion	0.76	$277.00 million	$9.82	8.18

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

Dividends

Chicago Atlantic Real Estate Finance pays an annual dividend of $1.88 per share and has a dividend yield of 15.2%. Bread Financial pays an annual dividend of $0.92 per share and has a dividend yield of 1.1%. Chicago Atlantic Real Estate Finance pays out 111.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bread Financial pays out 9.4% of its earnings in the form of a dividend. Chicago Atlantic Real Estate Finance has increased its dividend for 1 consecutive years. Chicago Atlantic Real Estate Finance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Chicago Atlantic Real Estate Finance and Bread Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chicago Atlantic Real Estate Finance	0	2	0	0	2.00
Bread Financial	3	8	5	0	2.13

Chicago Atlantic Real Estate Finance presently has a consensus price target of $14.00, suggesting a potential upside of 13.09%. Bread Financial has a consensus price target of $78.00, suggesting a potential downside of 2.90%. Given Chicago Atlantic Real Estate Finance’s higher possible upside, equities research analysts clearly believe Chicago Atlantic Real Estate Finance is more favorable than Bread Financial.

Institutional and Insider Ownership

25.5% of Chicago Atlantic Real Estate Finance shares are owned by institutional investors. Comparatively, 99.5% of Bread Financial shares are owned by institutional investors. 8.3% of Chicago Atlantic Real Estate Finance shares are owned by insiders. Comparatively, 0.6% of Bread Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Bread Financial beats Chicago Atlantic Real Estate Finance on 10 of the 17 factors compared between the two stocks.

About Chicago Atlantic Real Estate Finance

Chicago Atlantic Real Estate Finance, Inc. operates as a commercial real estate finance company in the United States. The company engages in originating, structuring, and investing in first mortgage loans and alternative structured financings secured by commercial real estate properties. Its portfolio primarily includes offers senior loans to state-licensed operators in the cannabis industry. The company has elected to be taxed as a real estate investment trust (REIT) and would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Chicago Atlantic Real Estate Finance, Inc. was incorporated in 2021 and is headquartered in Chicago, Illinois.

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.