MercadoLibre (NASDAQ:MELI – Get Rating) and Bread Financial (NYSE:BFH – Get Rating) are both retail/wholesale companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.
Insider and Institutional Ownership
89.0% of MercadoLibre shares are held by institutional investors. Comparatively, 95.7% of Bread Financial shares are held by institutional investors. 0.3% of MercadoLibre shares are held by company insiders. Comparatively, 0.2% of Bread Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
MercadoLibre has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500. Comparatively, Bread Financial has a beta of 1.99, suggesting that its share price is 99% more volatile than the S&P 500.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
MercadoLibre currently has a consensus price target of $1,388.18, suggesting a potential upside of 50.47%. Bread Financial has a consensus price target of $62.00, suggesting a potential upside of 63.72%. Given Bread Financial’s higher probable upside, analysts clearly believe Bread Financial is more favorable than MercadoLibre.
Earnings & Valuation
This table compares MercadoLibre and Bread Financial’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|MercadoLibre||$7.07 billion||6.57||$83.30 million||$4.73||195.04|
|Bread Financial||$3.27 billion||0.58||$801.00 million||$9.26||4.09|
Bread Financial has lower revenue, but higher earnings than MercadoLibre. Bread Financial is trading at a lower price-to-earnings ratio than MercadoLibre, indicating that it is currently the more affordable of the two stocks.
This table compares MercadoLibre and Bread Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
MercadoLibre, Inc. operates online commerce platforms in Latin America. It operates Mercado Libre Marketplace, an automated online commerce platform that enables businesses, merchants, and individuals to list merchandise and conduct sales and purchases online; and Mercado Pago FinTech platform, a financial technology solution platform, which facilitates transactions on and off its marketplaces by providing a mechanism that allows its users to send and receive payments online, as well as allows users to transfer money through their websites or on the apps. The company also offers Mercado Fondo that allows users to invest funds deposited in their Mercado Pago accounts; Mercado Credito, which extends loans to certain merchants and consumers; and Mercado Envios logistics solution that enables sellers on its platform to utilize third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. In addition, it provides Mercado Libre Classifieds, an online classified listing service, where users can list and purchase motor vehicles, real estate, and services; Mercado Libre Ads, an advertising platform, which enables large retailers and brands to promote their products and services on the Internet; and Mercado Shops, an online storefronts solution that enables users to set-up, manage, and promote their own digital stores. MercadoLibre, Inc. was incorporated in 1999 and is headquartered in Montevideo, Uruguay.
About Bread Financial
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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