Reviewing Bread Financial (NYSE:BFH) and Edgio (NASDAQ:EGIO)

Bread Financial (NYSE:BFH – Get Rating) and Edgio (NASDAQ:EGIO – Get Rating) are both small-cap business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Institutional and Insider Ownership

96.6% of Bread Financial shares are held by institutional investors. Comparatively, 35.5% of Edgio shares are held by institutional investors. 0.2% of Bread Financial shares are held by company insiders. Comparatively, 10.2% of Edgio shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings for Bread Financial and Edgio, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bread Financial	0	4	3	0	2.43
Edgio	0	4	0	1	2.40

Bread Financial presently has a consensus target price of $53.00, indicating a potential upside of 68.47%. Edgio has a consensus target price of $2.70, indicating a potential upside of 223.74%. Given Edgio’s higher possible upside, analysts clearly believe Edgio is more favorable than Bread Financial.

Valuation & Earnings

This table compares Bread Financial and Edgio’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bread Financial	$3.87 billion	0.41	$223.00 million	$4.46	7.05
Edgio	$316.31 million	0.58	-$54.76 million	($0.50)	-1.67

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

Profitability

This table compares Bread Financial and Edgio’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bread Financial	5.13%	9.69%	0.99%
Edgio	-27.17%	-16.61%	-8.55%

Risk & Volatility

Bread Financial has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500. Comparatively, Edgio has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Summary

Bread Financial beats Edgio on 11 of the 15 factors compared between the two stocks.

About Bread Financial

(Get Rating)

Bread Financial Holdings, Inc. engages in the provision of data-driven and transaction-based marketing, customer loyalty and payment solutions. Its products and services include credit cards, loan financing, processing, and servicing, marketing, data and analytics, and digital offerings. The company was founded in 1996 and is headquartered in Columbus, OH.

About Edgio

(Get Rating)

Edgio, Inc. engages in the provision of content delivery network services. Its products include digital content and video delivery, cloud security, edge computing, origin storage and support services. The firm’s solutions include realtime streaming, file distribution, live video and video on demand. The company was founded by Michael M. Gordon, Allan M. Kalpan, Nathan F. Raciborski and William H. Rinehart in June 2001 and is headquartered in Phoenix, AZ.