Reviewing Bread Financial (BFH) and Its Peers

Bread Financial (NYSE:BFHGet Rating) is one of 226 public companies in the “Business services, not elsewhere classified” industry, but how does it weigh in compared to its competitors? We will compare Bread Financial to related companies based on the strength of its profitability, valuation, analyst recommendations, risk, dividends, earnings and institutional ownership.

Risk and Volatility

Bread Financial has a beta of 1.97, suggesting that its share price is 97% more volatile than the S&P 500. Comparatively, Bread Financial’s competitors have a beta of 1.04, suggesting that their average share price is 4% more volatile than the S&P 500.

Earnings & Valuation

This table compares Bread Financial and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Bread Financial $3.27 billion $801.00 million 3.52
Bread Financial Competitors $3.24 billion $429.38 million 15.53

Bread Financial has higher revenue and earnings than its competitors. Bread Financial is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Insider & Institutional Ownership

99.4% of Bread Financial shares are owned by institutional investors. Comparatively, 59.8% of shares of all “Business services, not elsewhere classified” companies are owned by institutional investors. 0.2% of Bread Financial shares are owned by insiders. Comparatively, 13.9% of shares of all “Business services, not elsewhere classified” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Bread Financial pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. Bread Financial pays out 5.8% of its earnings in the form of a dividend. As a group, “Business services, not elsewhere classified” companies pay a dividend yield of 1.3% and pay out 26.5% of their earnings in the form of a dividend. Bread Financial is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Bread Financial and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bread Financial 0 0 0 0 N/A
Bread Financial Competitors 1390 6845 12208 346 2.55

As a group, “Business services, not elsewhere classified” companies have a potential upside of 56.05%. Given Bread Financial’s competitors higher possible upside, analysts plainly believe Bread Financial has less favorable growth aspects than its competitors.

Profitability

This table compares Bread Financial and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bread Financial 18.26% 36.46% 3.63%
Bread Financial Competitors -14.09% -16.91% -6.52%

Summary

Bread Financial beats its competitors on 9 of the 12 factors compared.

About Bread Financial (Get Rating)

Bread Financial Holdings Inc. provides tech-forward payment and lending solutions to customers and consumer-based industries in North America. It offers credit card and other loans financing services, including risk management solutions, account origination, and funding services for approximately 130 private label and co-brand credit card programs, as well as through Bread partnerships to approximately 500 small-and medium-sized businesses merchants; and Comenity-branded general purpose cash-back credit. The company also manages and services the loans it originates for private label, co-brand, and general-purpose credit card programs and Bread BNPL (installment loans, split-pay) products; and provides marketing, and data and analytics services. In addition, it offers an enhanced digital suite that includes a unified software development kit, which provides access to its suite of products, as well as promotes credit payment options earlier in the shopping experience. Further, the company through Bread, a digital payments platform and robust suite of application programming interfaces allows merchants and partners to integrate online point-of-sale financing and other digital payment products, including installment and split-pay solutions. The company was formerly known as Alliance Data Systems Corporation and changed its name to Bread Financial Holdings Inc. in March 2022. Bread Financial Holdings Inc. was founded in 1996 and is headquartered in Columbus, Ohio.

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