Brookfield (NYSE:BN) & EACO (OTCMKTS:EACO) Critical Analysis

EACO (OTCMKTS:EACO) and Brookfield (NYSE:BN) are both energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Valuation and Earnings

This table compares EACO and Brookfield”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
EACO	$427.93 million	0.84	$32.29 million	$6.59	11.23
Brookfield	$86.01 billion	1.34	$641.00 million	$0.36	129.68

Brookfield has higher revenue and earnings than EACO. EACO is trading at a lower price-to-earnings ratio than Brookfield, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares EACO and Brookfield’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
EACO	7.55%	22.66%	15.25%
Brookfield	1.34%	3.92%	1.24%

Risk & Volatility

EACO has a beta of 0.07, suggesting that its share price is 93% less volatile than the S&P 500. Comparatively, Brookfield has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for EACO and Brookfield, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
EACO	0	0	0	0	0.00
Brookfield	0	2	10	2	3.00

Brookfield has a consensus price target of $53.47, indicating a potential upside of 14.53%. Given Brookfield’s stronger consensus rating and higher possible upside, analysts plainly believe Brookfield is more favorable than EACO.

Institutional and Insider Ownership

61.6% of Brookfield shares are owned by institutional investors. 97.9% of EACO shares are owned by insiders. Comparatively, 11.0% of Brookfield shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Brookfield beats EACO on 10 of the 15 factors compared between the two stocks.

About EACO

EACO Corporation, through its subsidiary, Bisco Industries, Inc., distributes and sells electronic components and fasteners in the United States, Asia, Canada, and internationally. It offers electronic components, such as spacers and standoffs, card guides and ejectors, component holders and fuses, circuit board connectors, and cable components, as well as various fasteners and hardware products. The company also provides customized services and solutions for various production needs, including special packaging, bin stocking, kitting and assembly, bar coding, electronic requisitioning, integrated supply programs, and others. It supplies parts used in the manufacture of products to a range of industries, including aerospace, circuit board, communication, computer, fabrication, instrumentation, industrial equipment, and marine. The company sells its products primarily to the original equipment manufacturers through its sales representatives and distribution centers. EACO Corporation was founded in 1973 and is headquartered in Anaheim, California.

About Brookfield

Brookfield Corporation is an alternative asset manager and REIT/Real Estate Investment Manager firm focuses on real estate, renewable power, infrastructure and venture capital and private equity assets. It manages a range of public and private investment products and services for institutional and retail clients. It typically makes investments in sizeable, premier assets across geographies and asset classes. It invests both its own capital as well as capital from other investors. Within private equity and venture capital, it focuses on acquisition, early ventures, control buyouts and financially distressed, buyouts and corporate carve-outs, recapitalizations, convertible, senior and mezzanine financings, operational and capital structure restructuring, strategic re-direction, turnaround, and under-performing midmarket companies. It invests in both public debt and equity markets. It invests in private equity sectors with focus on Business Services include infrastructure, healthcare, road fuel distribution and marketing, construction and real estate; Industrials include manufacturers of automotive batteries, graphite electrodes, returnable plastic packaging, and sanitation management and development; and Residential/ infrastructure services. It targets companies which likely possess underlying real assets, primarily in sectors such as industrial products, building materials, metals, mining, homebuilding, oil and gas, paper and packaging, manufacturing and forest product sectors. It invests globally with focus on North America including Brazil, the United States, Canada; Europe; and Australia; and Asia-Pacific. The firm considers equity investments in the range of $2 million to $500 million. It has a four-year investment period and a 10-year term with two one-year extensions. The firm prefers to take minority stake and majority stake. Brookfield Corporation was founded in 1997 and based in Toronto, Canada with additional offices across Northern America; South America; Europe; Middle East and Asia.