Comparing Burford Capital (NYSE:BUR) & Perella Weinberg Partners (NASDAQ:PWP)

Burford Capital (NYSE:BUR) and Perella Weinberg Partners (NASDAQ:PWP) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Institutional and Insider Ownership

41.1% of Perella Weinberg Partners shares are held by institutional investors. 8.9% of Burford Capital shares are held by insiders. Comparatively, 26.1% of Perella Weinberg Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Burford Capital pays an annual dividend of $0.12 per share and has a dividend yield of 3.0%. Perella Weinberg Partners pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Burford Capital pays out -1.6% of its earnings in the form of a dividend. Perella Weinberg Partners pays out 116.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Burford Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Burford Capital has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Perella Weinberg Partners has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Burford Capital and Perella Weinberg Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burford Capital	1	3	2	0	2.17
Perella Weinberg Partners	1	1	2	0	2.25

Burford Capital presently has a consensus price target of $9.33, suggesting a potential upside of 135.39%. Perella Weinberg Partners has a consensus price target of $22.63, suggesting a potential upside of 46.73%. Given Burford Capital’s higher possible upside, equities research analysts plainly believe Burford Capital is more favorable than Perella Weinberg Partners.

Profitability

This table compares Burford Capital and Perella Weinberg Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burford Capital	15.14%	11.72%	5.42%
Perella Weinberg Partners	2.82%	-19.90%	6.78%

Valuation & Earnings

This table compares Burford Capital and Perella Weinberg Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burford Capital	-$1.54 billion	-0.56	$62.57 million	($7.33)	-0.54
Perella Weinberg Partners	$750.90 million	1.91	$35.48 million	$0.24	64.25

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

Summary

Perella Weinberg Partners beats Burford Capital on 9 of the 15 factors compared between the two stocks.

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.

About Perella Weinberg Partners

Perella Weinberg Partners, an independent investment banking company, provides strategic and financial advice services in the United States and internationally. The company offers advisory services related to strategic and financial decisions, mergers and acquisition execution, shareholder and defense advisory, and financing and capital solutions advice with resources focused on restructuring, liability management, and capital markets advisory, as well as underwriting and research services primarily for the energy and related industries. It serves public multinational corporations, mid-sized public and private companies, financial sponsors, individual entrepreneurs, private and institutional investors, creditor committees, and government institutions in consumer and retail; energy and energy transition; financial services and FinTech; healthcare; industrials and infrastructure; and technology, telecommunication, and media industries. Perella Weinberg Partners is headquartered in New York, New York.