Critical Contrast: Cass Information Systems (NASDAQ:CASS) & B. Riley Financial (NASDAQ:RILY)

Cass Information Systems (NASDAQ:CASS) and B. Riley Financial (NASDAQ:RILY) are both small-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cass Information Systems $148.27 million 4.47 $30.27 million N/A N/A
B. Riley Financial $422.99 million 1.33 $15.51 million N/A N/A

Cass Information Systems has higher earnings, but lower revenue than B. Riley Financial.

Institutional and Insider Ownership

52.6% of Cass Information Systems shares are owned by institutional investors. Comparatively, 47.3% of B. Riley Financial shares are owned by institutional investors. 4.6% of Cass Information Systems shares are owned by company insiders. Comparatively, 24.6% of B. Riley Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Cass Information Systems pays an annual dividend of $1.04 per share and has a dividend yield of 2.3%. B. Riley Financial pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Cass Information Systems has raised its dividend for 14 consecutive years. Cass Information Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Cass Information Systems and B. Riley Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cass Information Systems 0 0 0 0 N/A
B. Riley Financial 0 0 0 0 N/A

Profitability

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

Net Margins Return on Equity Return on Assets
Cass Information Systems 20.14% 13.19% 1.83%
B. Riley Financial 4.05% 14.44% 1.99%

Risk and Volatility

Cass Information Systems has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, B. Riley Financial has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Summary

Cass Information Systems beats B. Riley Financial on 7 of the 12 factors compared between the two stocks.

About Cass Information Systems

Cass Information Systems, Inc. provides payment and information processing services to manufacturing, distribution, and retail enterprises in the United States. It operates through two segments, Information Services and Banking Services. The company's services include freight invoice rating, payment processing, auditing, and the generation of accounting and transportation information. It also processes and pays energy invoices, including electricity, gas, waste, and other facility related expenses; and provides telecommunications expense management solutions comprising bill processing, audit, and payment services for telephone, data line, wireless, and communication equipment expenses. In addition, the company, through its banking subsidiary, Cass Commercial Bank, provides a range of commercial banking products and services, such as checking, savings, and time deposit accounts; commercial and commercial real estate loans; and other cash management services to privately-owned businesses and faith-related ministries. Further, it provides B2B payment platform for clients that require an agile fintech partner. It operates through its banking facility near downtown St. Louis, Missouri; operating branch in the Bridgeton, Missouri; and additional leased facilities in Fenton, Missouri, Santa Ana, California, and Colorado Springs, Colorado. The company was formerly known as Cass Commercial Corporation and changed its name to Cass Information Systems, Inc. in January 2001. Cass Information Systems, Inc. was founded in 1906 and is headquartered in St. Louis, Missouri.

About B. Riley Financial

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.

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