Bread Financial (NYSE:BFH – Get Rating) and Edgio (NASDAQ:EGIO – Get Rating) are both small-cap business services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
Profitability
This table compares Bread Financial and Edgio’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bread Financial | 5.13% | 9.69% | 0.99% |
| Edgio | -27.17% | -16.61% | -8.55% |
Analyst Ratings
This is a summary of current recommendations and price targets for Bread Financial and Edgio, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bread Financial | 0 | 4 | 3 | 0 | 2.43 |
| Edgio | 0 | 4 | 0 | 1 | 2.40 |
Insider and Institutional Ownership
96.6% of Bread Financial shares are owned by institutional investors. Comparatively, 35.5% of Edgio shares are owned by institutional investors. 0.2% of Bread Financial shares are owned by company insiders. Comparatively, 10.2% of Edgio shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
Bread Financial has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500. Comparatively, Edgio has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.
Earnings and Valuation
This table compares Bread Financial and Edgio’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bread Financial | $3.87 billion | 0.41 | $223.00 million | $4.46 | 7.05 |
| Edgio | $316.31 million | 0.58 | -$54.76 million | ($0.50) | -1.67 |
Bread Financial has higher revenue and earnings than Edgio. Edgio is trading at a lower price-to-earnings ratio than Bread Financial, indicating that it is currently the more affordable of the two stocks.
Summary
Bread Financial beats Edgio on 11 of the 15 factors compared between the two stocks.
About Bread Financial
Bread Financial Holdings, Inc. engages in the provision of data-driven and transaction-based marketing, customer loyalty and payment solutions. Its products and services include credit cards, loan financing, processing, and servicing, marketing, data and analytics, and digital offerings. The company was founded in 1996 and is headquartered in Columbus, OH.
About Edgio
Edgio, Inc. engages in the provision of content delivery network services. Its products include digital content and video delivery, cloud security, edge computing, origin storage and support services. The firm’s solutions include realtime streaming, file distribution, live video and video on demand. The company was founded by Michael M. Gordon, Allan M. Kalpan, Nathan F. Raciborski and William H. Rinehart in June 2001 and is headquartered in Phoenix, AZ.
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