Critical Contrast: B. Riley Financial (NASDAQ:RILY) & Mercadolibre (NASDAQ:MELI)

B. Riley Financial (NASDAQ:RILY) and Mercadolibre (NASDAQ:MELI) are both business services companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for B. Riley Financial and Mercadolibre, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
B. Riley Financial 0 0 0 0 N/A
Mercadolibre 1 4 11 0 2.63



Mercadolibre has a consensus target price of $669.53, indicating a potential upside of 24.61%. Given Mercadolibre’s higher probable upside, analysts clearly believe Mercadolibre is more favorable than B. Riley Financial.

Profitability

This table compares B. Riley Financial and Mercadolibre’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
B. Riley Financial 4.76% 16.21% 2.23%
Mercadolibre 0.87% 1.24% 0.47%

Insider and Institutional Ownership

46.7% of B. Riley Financial shares are owned by institutional investors. Comparatively, 81.5% of Mercadolibre shares are owned by institutional investors. 24.6% of B. Riley Financial shares are owned by insiders. Comparatively, 0.4% of Mercadolibre shares are owned by 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.

Earnings and Valuation

This table compares B. Riley Financial and Mercadolibre’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
B. Riley Financial $422.99 million 1.56 $15.51 million N/A N/A
Mercadolibre $1.44 billion 18.55 -$36.58 million ($0.82) -655.23

B. Riley Financial has higher earnings, but lower revenue than Mercadolibre.

Risk and Volatility

B. Riley Financial has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Mercadolibre has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500.

Dividends

B. Riley Financial pays an annual dividend of $0.70 per share and has a dividend yield of 2.9%. Mercadolibre does not pay a dividend. Mercadolibre has increased its dividend for 3 consecutive years.

B. Riley Financial Company Profile

B. Riley Financial, Inc., through its subsidiaries, provides collaborative financial services and solutions in North America, Australia, and Europe. The company operates in four segments: Capital Markets, Auction and Liquidation, Valuation and Appraisal, and Principal Investments – United Online and magicJack. It offers investment banking services, including merger and acquisitions, restructuring advisory, initial and secondary public offerings, and institutional private placements; and corporate finance, research, securities lending, wealth management, and sales and trading services to corporate, institutional, and high net worth clients. The company also provides retail store liquidation, and wholesale and industrial assets disposition services; valuation and appraisal services to financial institutions, lenders, private equity firms, and other providers of capital; and consumer subscription services consisting of Internet access services and devices under the NetZero and Juno brands, as well as voice over IP cloud-based technology and communication services. In addition, it offers advisory services to private funds, and institutional and high net worth investors; multi-family office practice and wealth management services to ultra-high net worth individuals and families; and senior secured and second lien secured loans to middle market public and the private U.S. companies. The company was formerly known as Great American Group, Inc. and changed its name to B. Riley Financial, Inc. in November 2014. B. Riley Financial, Inc. was founded in 1973 and is headquartered in Woodland Hills, California.

Mercadolibre Company Profile

MercadoLibre, Inc. operates online commerce platforms in Latin America. It operates MercadoLibre Marketplace, an automated online commerce platform that enables businesses and individuals to list merchandise and conduct sales and purchases online; and MercadoPago FinTech, 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, and allows merchants to process transactions via their Websites and mobile apps, as well as in their brick-and-mortar stores through QR and mobile points of sale. The company also offers MercadoFondo, an asset management product; and MercadoCredito, a lending solution. In addition, it provides MercadoEnvios logistics solution, which offers its platform technological and operational integration services with third-party carriers and other logistics service providers, as well as fulfillment and warehousing services for sellers. Further, the company provides MercadoLibre Classifieds service that enables users to list their offerings related to motor vehicles, vessels, aircraft, and real estate and services outside the Marketplace platform. Additionally, it offers MercadoLibre Advertising platform, which enables retailers and various other consumer brands to promote their products and services on the Internet by providing branding and performance marketing solutions. The company also provides MercadoShops, a software-as-a-service hosted online store solution that enables users to set-up, manage, and promote their own Webstores. The company was founded in 1999 and is headquartered in Buenos Aires, Argentina.

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