Contrasting X Financial (NYSE:XYF) & Burke & Herbert Financial Services (NASDAQ:BHRB)

X Financial (NYSE:XYF) and Burke & Herbert Financial Services (NASDAQ:BHRB) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.

Risk and Volatility

X Financial has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, Burke & Herbert Financial Services has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500.

Profitability

This table compares X Financial and Burke & Herbert Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
X Financial	22.75%	24.56%	14.10%
Burke & Herbert Financial Services	23.89%	15.11%	1.48%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for X Financial and Burke & Herbert Financial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
X Financial	0	1	0	0	2.00
Burke & Herbert Financial Services	0	2	2	1	2.80

Burke & Herbert Financial Services has a consensus target price of $71.50, suggesting a potential upside of 2.58%. Given Burke & Herbert Financial Services’ stronger consensus rating and higher probable upside, analysts clearly believe Burke & Herbert Financial Services is more favorable than X Financial.

Earnings and Valuation

This table compares X Financial and Burke & Herbert Financial Services”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
X Financial	$804.43 million	0.27	$210.97 million	$5.66	0.93
Burke & Herbert Financial Services	$491.11 million	2.13	$117.32 million	$7.72	9.03

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

Institutional and Insider Ownership

1.2% of X Financial shares are owned by institutional investors. 31.6% of X Financial shares are owned by insiders. Comparatively, 10.9% of Burke & Herbert Financial Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

X Financial pays an annual dividend of $0.48 per share and has a dividend yield of 9.1%. Burke & Herbert Financial Services pays an annual dividend of $2.20 per share and has a dividend yield of 3.2%. X Financial pays out 8.5% of its earnings in the form of a dividend. Burke & Herbert Financial Services pays out 28.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Burke & Herbert Financial Services has raised its dividend for 1 consecutive years. X Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Burke & Herbert Financial Services beats X Financial on 10 of the 18 factors compared between the two stocks.

About X Financial

X Financial provides personal finance services in the People’s Republic of China. The company offers services as an online marketplace connecting borrowers and investors or institutional funding partners. Its loan products include Xiaoying credit loan, which consists of Xiaoying card loan; and Xiaoying preferred loan to small business owners. The company also offers Xiaoying housing loan, a home equity loan product for property owners; investment products through Xiaoying wealth management platform, such as funds, money market, and insurance products; and loan facilitation services to other platforms. In addition, it engages in the technology development, service, and sale of products; and provision of guarantee and consulting services. The company was incorporated in 2014 and is headquartered in Shenzhen, the People’s Republic of China.

About Burke & Herbert Financial Services

Burke Herbert Financial Services Corp. is a bank holding company, which engages in the provision of banking products and financial services to small to medium-sized businesses, their owners and employees, professional corporations, non-profits, and individuals. It operates through the following loan portfolio segments: Commercial Real Estate, Owner-Occupied Commercial Real Estate, Acquisition, Construction, and Development, Commercial and Industrial, Single Family Residential (1-4 Units), and Consumer Non-Real Estate and Other. The Commercial Real Estate segment includes leasing of the real estate collateral or income generated from the sale of the collateral. The Owner-Occupied Commercial Real Estate segment focuses on the operations of the business that occupies the property and the value of the collateral. The Acquisition, Construction, and Development segment offers creditworthiness of the borrower, project completion within budget, sale after completion, and the value of the collateral. The Commercial and Industrial segment is involved in the operations of the business and the value of the collateral. The Single Family Residential (1-4 Units) segment provides loans for investment purpose carry risk associated with the continued creditworthiness of the borrower, the value of the collateral, and either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. The Consumer Non-Real Estate and Other segment covers loans carry risk associated with the creditworthiness of the borrower and the value of the collateral. The company was founded on September 14, 2022 and is headquartered in Alexandria, VA.