Priority Technology (NASDAQ:PRTH) and B. Riley Financial (NASDAQ:RILY) are both small-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider and Institutional Ownership

7.4% of Priority Technology shares are held by institutional investors. Comparatively, 50.7% of B. Riley Financial shares are held by institutional investors. 24.6% of B. Riley Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Priority Technology and B. Riley Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Priority Technology -7.20% N/A -6.79%
B. Riley Financial 9.45% 27.38% 3.78%

Valuation and Earnings

This table compares Priority Technology and B. Riley Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Priority Technology $424.42 million 0.48 -$15.04 million N/A N/A
B. Riley Financial $422.99 million 1.65 $15.51 million N/A N/A

B. Riley Financial has lower revenue, but higher earnings than Priority Technology.

Analyst Recommendations

This is a summary of current ratings for Priority Technology and B. Riley Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Priority Technology 0 0 1 0 3.00
B. Riley Financial 0 0 0 0 N/A

Priority Technology presently has a consensus target price of $9.00, suggesting a potential upside of 199.00%. Given Priority Technology’s higher probable upside, equities research analysts clearly believe Priority Technology is more favorable than B. Riley Financial.

Summary

B. Riley Financial beats Priority Technology on 7 of the 10 factors compared between the two stocks.

About Priority Technology

Priority Technology Holdings, Inc. provides merchant acquiring and commercial payment solutions in the United States. It operates through two segments, Consumer Payments; and Commercial Payments and Managed Services. The company offers MX product suite, including MX ISO/Agent and VIMAS reseller technology systems, and MX Merchant products, which provide resellers and merchant clients a customizable set of business applications that enable to manage critical business work functions and revenue performance. It also provides CPX, a turnkey commercial payments platform comprising CPX Access, CPX Gateway, CPX Commercial Acceptance, and CPX Payments solutions that automate the AP payment process between buyers and suppliers to enhance financial rebates and automate payment of vendor payments. In addition, the company offers curated managed services and a suite of integrated automated payment solutions to various financial institutions and card networks. It serves small and mid-sized businesses, and enterprises, as well as distribution partners, including retail and wholesale independent sales organizations, financial institutions, and independent software vendors. The company was founded in 2005 and is headquartered in Alpharetta, Georgia.

About B. Riley Financial

B. Riley Financial, Inc., through its subsidiaries, provides collaborative financial services and solutions in North America, Australia, and Europe. The company operates in four segments: Capital Markets, Auction and Liquidation, Valuation and Appraisal, and Principal Investments – United Online and magicJack. It offers investment banking services, including merger and acquisitions, restructuring advisory, initial and secondary public offerings, and institutional private placements; and corporate finance, research, securities lending, wealth management, and sales and trading services to corporate, institutional, and high net worth clients. The company also provides retail store liquidation, and wholesale and industrial assets disposition services; valuation and appraisal services to financial institutions, lenders, private equity firms, and other providers of capital; and consumer subscription services consisting of Internet access services and devices under the NetZero and Juno brands, as well as voice over IP cloud-based technology and communication services. In addition, it offers advisory services to private funds, and institutional and high net worth investors; multi-family office practice and wealth management services to ultra-high net worth individuals and families; and senior secured and second lien secured loans to middle market public and the private U.S. companies. The company was formerly known as Great American Group, Inc. and changed its name to B. Riley Financial, Inc. in November 2014. B. Riley Financial, Inc. was founded in 1973 and is headquartered in Woodland Hills, California.

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