Financial Analysis: Star Equity (NASDAQ:STRR) & Benev Capital (OTCMKTS:BEVFF)

Benev Capital (OTCMKTS:BEVFF) and Star Equity (NASDAQ:STRR) are both small-cap multi-sector conglomerates companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

This is a summary of current ratings for Benev Capital and Star Equity, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Benev Capital	0	0	0	0	0.00
Star Equity	1	2	1	1	2.40

Star Equity has a consensus price target of $16.50, indicating a potential upside of 71.34%. Given Star Equity’s stronger consensus rating and higher probable upside, analysts plainly believe Star Equity is more favorable than Benev Capital.

Insider and Institutional Ownership

3.8% of Star Equity shares are held by institutional investors. 12.0% of Benev Capital shares are held by company insiders. Comparatively, 10.4% of Star Equity 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.

Valuation & Earnings

This table compares Benev Capital and Star Equity”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Benev Capital	$50.66 million	10.64	$26.24 million	$0.15	21.00
Star Equity	$172.16 million	0.21	-$5.92 million	($2.05)	-4.70

Benev Capital has higher earnings, but lower revenue than Star Equity. Star Equity is trading at a lower price-to-earnings ratio than Benev Capital, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Benev Capital and Star Equity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Benev Capital	51.80%	12.72%	6.10%
Star Equity	-3.44%	-1.17%	-0.73%

Volatility and Risk

Benev Capital has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, Star Equity has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Summary

Benev Capital beats Star Equity on 9 of the 15 factors compared between the two stocks.

About Benev Capital

Diversified Royalty Corp., a multi-royalty corporation, engages in the acquisition of royalties from multi-location businesses and franchisors in North America. It owns the Sutton, Mr. Lube + Tires, AIR MILES, Mr. Mikes, Nurse Next Door, Oxford Learning Centres, Stratus Building Solutions, and BarBurrito trademarks. The company was formerly known as BENEV Capital Inc. and changed its name to Diversified Royalty Corp. in September 2014. Diversified Royalty Corp. was founded in 1960 and is headquartered in Vancouver, Canada.

About Star Equity

Star Equity Holdings, Inc. engages in the construction business in the United States and internationally. It operates through two segments: Construction, and Investments. It manufactures modular housing units, structural wall panels, permanent wood foundation systems, and other engineered wood products; supplies general contractors with building materials; holds real estate assets; and manages investments. The company was formerly known as Digirad Corporation and changed its name to Star Equity Holdings, Inc. in December 2020. Star Equity Holdings, Inc. was founded in 1985 and is headquartered in Old Greenwich, Connecticut.