Analyzing Jefferies Financial Group (NYSE:JEF) and Burke & Herbert Financial Services (NASDAQ:BHRB)

Jefferies Financial Group (NYSE:JEF) and Burke & Herbert Financial Services (NASDAQ:BHRB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Valuation & Earnings

This table compares Jefferies Financial Group and Burke & Herbert Financial Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jefferies Financial Group	$10.82 billion	1.03	$710.47 million	$2.83	19.11
Burke & Herbert Financial Services	$491.11 million	2.10	$117.32 million	$7.72	8.87

Jefferies Financial Group has higher revenue and earnings than Burke & Herbert Financial Services. Burke & Herbert Financial Services is trading at a lower price-to-earnings ratio than Jefferies Financial Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Jefferies Financial Group and Burke & Herbert Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jefferies Financial Group	6.56%	7.27%	1.07%
Burke & Herbert Financial Services	23.89%	15.11%	1.48%

Volatility and Risk

Jefferies Financial Group has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, Burke & Herbert Financial Services has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Jefferies Financial Group and Burke & Herbert Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jefferies Financial Group	0	3	4	0	2.57
Burke & Herbert Financial Services	0	2	2	1	2.80

Jefferies Financial Group presently has a consensus target price of $72.71, suggesting a potential upside of 34.49%. Burke & Herbert Financial Services has a consensus target price of $71.50, suggesting a potential upside of 4.38%. Given Jefferies Financial Group’s higher possible upside, research analysts plainly believe Jefferies Financial Group is more favorable than Burke & Herbert Financial Services.

Insider and Institutional Ownership

60.9% of Jefferies Financial Group shares are owned by institutional investors. 19.8% of Jefferies Financial Group shares are owned by company insiders. Comparatively, 10.9% of Burke & Herbert Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Jefferies Financial Group pays an annual dividend of $1.60 per share and has a dividend yield of 3.0%. Burke & Herbert Financial Services pays an annual dividend of $2.20 per share and has a dividend yield of 3.2%. Jefferies Financial Group pays out 56.5% of its earnings in the form of a dividend. Burke & Herbert Financial Services pays out 28.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Jefferies Financial Group has increased its dividend for 2 consecutive years and Burke & Herbert Financial Services has increased its dividend for 1 consecutive years. Burke & Herbert Financial Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Jefferies Financial Group

Jefferies Financial Group Inc. operates as an investment banking and capital markets firm in the Americas, Europe, the Middle East, and the Asia-Pacific. The company operates in two segments, Investment Banking and Capital Markets, and Asset Management. It provides investment banking, advisory services with respect to mergers or acquisitions, debt financing, restructurings or recapitalizations, and private capital advisory transactions; underwriting and placement services related to corporate debt, municipal bonds, mortgage-backed and asset-backed securities, equity and equity-linked securities, and loan syndication services; and corporate lending services. The company also offers financing, securities lending, and other prime brokerage services; equities research, sales, and trading services; wealth management services; and online foreign exchange trading services. In addition, it provides investment grade distressed debt securities, U.S. and European government and agency securities, municipal bonds, leveraged loans, emerging markets debt, and interest rate and credit index derivative products; and manages and offers services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1962 and is headquartered in New York, New York.

About Burke & Herbert Financial Services

Burke Herbert Financial Services Corp. is a bank holding company, which engages in the provision of banking products and financial services to small to medium-sized businesses, their owners and employees, professional corporations, non-profits, and individuals. It operates through the following loan portfolio segments: Commercial Real Estate, Owner-Occupied Commercial Real Estate, Acquisition, Construction, and Development, Commercial and Industrial, Single Family Residential (1-4 Units), and Consumer Non-Real Estate and Other. The Commercial Real Estate segment includes leasing of the real estate collateral or income generated from the sale of the collateral. The Owner-Occupied Commercial Real Estate segment focuses on the operations of the business that occupies the property and the value of the collateral. The Acquisition, Construction, and Development segment offers creditworthiness of the borrower, project completion within budget, sale after completion, and the value of the collateral. The Commercial and Industrial segment is involved in the operations of the business and the value of the collateral. The Single Family Residential (1-4 Units) segment provides loans for investment purpose carry risk associated with the continued creditworthiness of the borrower, the value of the collateral, and either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. The Consumer Non-Real Estate and Other segment covers loans carry risk associated with the creditworthiness of the borrower and the value of the collateral. The company was founded on September 14, 2022 and is headquartered in Alexandria, VA.