Comparing Performant Financial (PFMT) and Ritchie Bros. Auctioneers (RBA)
Performant Financial (NASDAQ: PFMT) and Ritchie Bros. Auctioneers (NYSE:RBA) are both business services companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.
Risk and Volatility
Performant Financial has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500. Comparatively, Ritchie Bros. Auctioneers has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Performant Financial and Ritchie Bros. Auctioneers, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Ritchie Bros. Auctioneers||2||5||5||0||2.25|
Ritchie Bros. Auctioneers has a consensus price target of $29.45, suggesting a potential upside of 13.79%. Given Ritchie Bros. Auctioneers’ stronger consensus rating and higher probable upside, analysts plainly believe Ritchie Bros. Auctioneers is more favorable than Performant Financial.
Ritchie Bros. Auctioneers pays an annual dividend of $0.68 per share and has a dividend yield of 2.6%. Performant Financial does not pay a dividend. Ritchie Bros. Auctioneers pays out 111.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Performant Financial has raised its dividend for 14 consecutive years.
Insider & Institutional Ownership
54.5% of Performant Financial shares are owned by institutional investors. Comparatively, 98.9% of Ritchie Bros. Auctioneers shares are owned by institutional investors. 33.6% of Performant Financial shares are owned by company insiders. Comparatively, 0.4% of Ritchie Bros. Auctioneers shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Performant Financial and Ritchie Bros. Auctioneers’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Performant Financial||$141.36 million||0.65||-$11.45 million||($0.50)||-3.62|
|Ritchie Bros. Auctioneers||$566.40 million||4.90||$91.83 million||$0.61||42.43|
Ritchie Bros. Auctioneers has higher revenue and earnings than Performant Financial. Performant Financial is trading at a lower price-to-earnings ratio than Ritchie Bros. Auctioneers, indicating that it is currently the more affordable of the two stocks.
This table compares Performant Financial and Ritchie Bros. Auctioneers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Ritchie Bros. Auctioneers||11.43%||13.04%||4.87%|
Ritchie Bros. Auctioneers beats Performant Financial on 12 of the 16 factors compared between the two stocks.
About Performant Financial
Performant Financial Corporation (Performant) provides technology-enabled recovery and related analytics services in the United States. The Company’s services identify and recover delinquent or defaulted assets and improper payments for both government and private clients in a range of markets. The Company provides its services on an outsourced basis where the Company handles many or all aspects of its clients’ recovery processes. The Company uses its technology-enabled services platform to provide recovery and analytics services in a range of markets for the identification and recovery of student loans, improper healthcare payments and delinquent state tax and federal treasury receivables. It provides recovery services to the government-supported student loan industry and its clients include the Department of Education and Guaranty Agencies, as well as private financial institutions. The Company provides recovery services related to improper payments in the healthcare market.
About Ritchie Bros. Auctioneers
Ritchie Bros Auctioneers Inc is a Canada-based holding company. The Company is an industrial auctioneer and used equipment distributor, selling used equipment and other assets. Its segments include Core Auction, which is a network of auction locations that conduct live, unreserved auctions with both on-site and online bidding, and Other, which includes its EquipmentOne and Mascus International Holding B.V. (Mascus) online services. EquipmentOne is an online marketplace that equipment sellers can navigate independently. EquipmentOne facilitates the completion of sales through a settlement process managed by EquipmentOne that protects both the seller and the buyer. Mascus is an online equipment listing service for used heavy machinery and trucks. It offers subscriptions to equipment dealers, brokers, exporters and equipment manufacturers to list equipment available for sale at a listed price. The Company, through Mascus, provides online advertising services, business tools and solutions.
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