Critical Review: BB Seguridade Participacoes (OTCMKTS:BBSEY) & Freedom (NASDAQ:FRHC)

BB Seguridade Participacoes (OTCMKTS:BBSEY) and Freedom (NASDAQ:FRHC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Risk and Volatility

BB Seguridade Participacoes has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500. Comparatively, Freedom has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Earnings and Valuation

This table compares BB Seguridade Participacoes and Freedom”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BB Seguridade Participacoes	$1.85 billion	7.82	$1.62 billion	$0.87	8.56
Freedom	$2.19 billion	3.87	$153.33 million	$2.51	55.06

BB Seguridade Participacoes has higher earnings, but lower revenue than Freedom. BB Seguridade Participacoes is trading at a lower price-to-earnings ratio than Freedom, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for BB Seguridade Participacoes and Freedom, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BB Seguridade Participacoes	1	1	0	1	2.33
Freedom	0	2	0	0	2.00

Freedom has a consensus price target of $138.00, indicating a potential downside of 0.14%. Given Freedom’s higher probable upside, analysts clearly believe Freedom is more favorable than BB Seguridade Participacoes.

Profitability

This table compares BB Seguridade Participacoes and Freedom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BB Seguridade Participacoes	87.73%	79.64%	43.86%
Freedom	7.00%	11.50%	1.35%

Insider and Institutional Ownership

0.0% of BB Seguridade Participacoes shares are held by institutional investors. Comparatively, 1.3% of Freedom shares are held by institutional investors. 70.0% of Freedom shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

About BB Seguridade Participacoes

BB Seguridade Participações S.A., through its subsidiaries operates in the insurance, pension plans, and bonds, businesses in Brazil. The company operates through Security and Brokerage segments. The Security segment offers life, property, rural, special risks and financial, transport, hulls, and housing people insurance products. It also offers pension plans, dental, and capitalization plans. The Brokerage segment engages in the brokerage, management, and promotion of pension plans, capitalization, capitalization, and dental plans. BB Seguridade Participações S.A. was incorporated in 2012 and is headquartered in Brasilia, Brazil. BB Seguridade Participações S.A. operates as a subsidiary of Banco do Brasil S.A.

About Freedom

Freedom Holding Corp., through its subsidiaries, provides securities brokerage, securities dealing, market making, investment research, investment counseling, and investment banking services. It offers retail brokerage services for exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, exchange traded options and futures contracts, government bonds, and mutual funds; securities trading; underwriting services; margin lending services collateralized by securities and cash in the customer’s account; various investment education and training courses; investment research services; and commercial banking services, including payment cards, digital mortgages, and digital business and digital auto loans, as well as Freedom Box, a package of payment acquiring services. The company also provides capital raising solutions for corporate clients through initial public offerings and follow-on offerings; and debt capital markets solutions that focuses on structuring and distributing private and public debt for various purposes, including buyouts, acquisitions, growth capital financings, and recapitalizations, as well as information processing services. In addition, it facilitates repurchase and reverse repurchase agreements in proprietary trading activities; and covers short positions and settle other securities obligations to accommodate customers’ needs and finance its inventory positions. Further, the company offers proprietary trading and investment services, as well as insurance products; and Tradernet software platform for client margin risk evaluation and middle office security transfer requests. It operates in Central Asia, Eastern Europe, rest of Europe, the United States, Russia, the Middle East, and Caucasus. The company was formerly known as BMB Munai, Inc. and changed its name to Freedom Holding Corp. Freedom Holding Corp. was incorporated in 1981 and is headquartered in Almaty, Kazakhstan.