Financial Survey: B. Riley Financial (NASDAQ:RILY) and Nasdaq (NASDAQ:NDAQ)

Nasdaq (NASDAQ:NDAQ) and B. Riley Financial (NASDAQ:RILY) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider & Institutional Ownership

72.5% of Nasdaq shares are held by institutional investors. Comparatively, 50.2% of B. Riley Financial shares are held by institutional investors. 0.6% of Nasdaq shares are held by company insiders. Comparatively, 27.8% of B. Riley Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Nasdaq and B. Riley Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nasdaq	0	1	8	2	3.09
B. Riley Financial	1	0	0	0	1.00

Nasdaq presently has a consensus price target of $110.30, indicating a potential upside of 24.27%. Given Nasdaq’s stronger consensus rating and higher probable upside, analysts clearly believe Nasdaq is more favorable than B. Riley Financial.

Valuation & Earnings

This table compares Nasdaq and B. Riley Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nasdaq	$8.22 billion	6.04	$1.79 billion	$3.43	25.88
B. Riley Financial	$967.60 million	0.25	$307.42 million	$12.70	0.47

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nasdaq	22.60%	18.38%	7.63%
B. Riley Financial	35.88%	39,260.09%	22.99%

Volatility & Risk

Nasdaq has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, B. Riley Financial has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Summary

Nasdaq beats B. Riley Financial on 9 of the 15 factors compared between the two stocks.

About Nasdaq

Nasdaq, Inc. operates as a technology company that serves capital markets and other industries worldwide. It operates in three segments: Capital Access Platforms, Financial Technology, and Market Services. The Capital Access Platforms segment sells and distributes historical and real-time market data; and develops and licenses Nasdaq-branded indices and financial products. This segment also offers investor relations intelligence, governance solutions, and ESG solutions; and insights and workflow solutions, as well as operates listing platforms. The Financial Technology segment offers Verafin, a cloud-based platform to detect, investigate, and report money laundering and financial frauds; surveillance solutions, including a SaaS platform to assist in complying with market rules, regulations, and internal market surveillance policies; AxiomSL, a risk data management and regulatory reporting solution; and Calypso, a front-to-back trading technology solution for the financial market. This segment also handles assets, comprising cash equities, equity derivatives, currencies, various interest-bearing securities, commodities, energy products, and digital currencies; and trade management and colocation services. The Market Platforms segment offers equity derivative trading and clearing, cash equity trading, fixed income and commodities trading and clearing, and currency trading services. This segment operates various exchanges and other marketplace facilities across various asset classes which includes derivatives, commodities, cash equity, debt, structured products, and exchange traded products; and provides clearing, settlement, and central depository services. The company was formerly known as The NASDAQ OMX Group, Inc. and changed its name to Nasdaq, Inc. in September 2015. Nasdaq, Inc. was founded in 1971 and is headquartered in New York, New York.

About B. Riley Financial

B. Riley Financial, Inc., through its subsidiaries, provides financial services to corporate, institutional, and high net worth clients in North America, Australia, the Asia Pacific, and Europe. The company operates through six segments: Capital Markets, Wealth Management, Financial Consulting, Auction and Liquidation, Communications, and Consumer. The Capital Markets segments offers investment banking, equity research, institutional sales and trading, securities lending, fund and asset management, direct lending, venture capital, proprietary trading, and investment services; merger and acquisition, restructuring advisory, and recapitalization services; public and private equity offerings; and debt financing solutions. This segment also trades in equity securities. The Wealth Management segment provides wealth management and tax services. The Financial Consulting segment offers bankruptcy restructuring and turnaround management, forensic accounting and litigation support, valuation and appraisal, and real estate services. The Auction and Liquidation Segment provides auction and liquidation services. The Communications segment offers dial-up, mobile broadband and digital subscriber line services under the NetZero and Juno brands; cloud communication services; VoIP cloud-based technology and communication devices and subscription services through magicJack; and mobile phone voice, text, and data services and devices through Marconi Wireless. The Consumer segment sells laptop and computer accessories. 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 Los Angeles, California.