Analyzing Burford Capital (NYSE:BUR) and Bakkt (NYSE:BKKT)

Bakkt (NYSE:BKKT) and Burford Capital (NYSE:BUR) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Risk & Volatility

Bakkt has a beta of 5.47, indicating that its stock price is 447% more volatile than the S&P 500. Comparatively, Burford Capital has a beta of 0.44, indicating that its stock price is 56% less volatile than the S&P 500.

Earnings & Valuation

This table compares Bakkt and Burford Capital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bakkt	$3.49 billion	0.04	-$74.85 million	($7.93)	-1.15
Burford Capital	$341.23 million	8.66	$610.52 million	$0.65	20.73

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Bakkt and Burford Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bakkt	0	0	0	0	0.00
Burford Capital	0	0	3	0	3.00

Burford Capital has a consensus target price of $19.50, indicating a potential upside of 44.71%. Given Burford Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Burford Capital is more favorable than Bakkt.

Institutional & Insider Ownership

11.1% of Bakkt shares are owned by institutional investors. 1.8% of Bakkt shares are owned by company insiders. Comparatively, 0.2% of Burford Capital shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Bakkt and Burford Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bakkt	-2.84%	-62.65%	-5.94%
Burford Capital	34.81%	8.07%	4.28%

Summary

Burford Capital beats Bakkt on 10 of the 14 factors compared between the two stocks.

About Bakkt

Bakkt Holdings, Inc. offers software as a service and application programming interface solutions for crypto and loyalty, powering engagement, and performance. The company operates Bakkt Marketplace, a platform that enables consumers to buy, sell, and store crypto in an embedded web experience; Bakkt Crypto, a platform that supports clients with a range of crypto solutions; and Bakkt Trust, institutional-grade qualified custody solution for market participants. Its platform also offers a range of loyalty solutions, including redemption solutions for various rewards categories comprising travel, gift cards, and merchandise; travel solutions that offer a retail e-commerce booking platform, as well as live-agent booking and servicing; and unified shopping experience. The company was founded in 2018 and is headquartered in Alpharetta, Georgia.

About Burford Capital

Burford Capital Limited provides legal finance products and services worldwide. The company operates through two segments, Capital Provision, and Asset Management and Other Provision. The Capital Provision segment provides capital to the legal industry or in connection with legal matters directly and through investment in private funds; legal risk management services; lower risk legal finance business focusing on pre-settlement litigation matters with lower risk and lower expected returns; post-settlement finance; and complex strategies in which it acts as a principal and acquires assets that are mispriced. The Asset Management and Other Services segment provides services to the legal industry, including litigation insurance. Burford Capital Limited was incorporated in 2009 and is based in Saint Peter Port, Guernsey.