Burford Capital (NYSE:BUR) vs. NewtekOne (NASDAQ:NEWT) Head-To-Head Contrast

NewtekOne (NASDAQ:NEWT) and Burford Capital (NYSE:BUR) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Dividends

NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 6.1%. Burford Capital pays an annual dividend of $0.12 per share and has a dividend yield of 1.5%. NewtekOne pays out 34.7% of its earnings in the form of a dividend. Burford Capital pays out 44.4% 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. NewtekOne has raised its dividend for 1 consecutive years. NewtekOne is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares NewtekOne and Burford Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewtekOne	$268.63 million	1.34	$58.18 million	$2.19	5.68
Burford Capital	$193.77 million	9.34	$62.57 million	$0.27	30.63

Burford Capital has lower revenue, but higher earnings than NewtekOne. NewtekOne is trading at a lower price-to-earnings ratio than Burford Capital, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

NewtekOne has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Burford Capital has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.

Profitability

This table compares NewtekOne and Burford Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NewtekOne	15.51%	19.52%	2.68%
Burford Capital	15.14%	1.97%	0.97%

Institutional & Insider Ownership

38.3% of NewtekOne shares are held by institutional investors. 6.7% of NewtekOne shares are held by insiders. Comparatively, 8.9% of Burford Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for NewtekOne and Burford Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewtekOne	0	4	0	1	2.40
Burford Capital	2	0	3	0	2.20

NewtekOne currently has a consensus price target of $15.00, indicating a potential upside of 20.68%. Burford Capital has a consensus price target of $16.00, indicating a potential upside of 93.47%. Given Burford Capital’s higher probable upside, analysts plainly believe Burford Capital is more favorable than NewtekOne.

Summary

NewtekOne beats Burford Capital on 12 of the 18 factors compared between the two stocks.

About NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.

About Burford Capital

Burford Capital Limited provides legal finance products and services worldwide. The company operates through two segments, Capital Provision, and Asset Management and Other Provision. The Capital Provision segment provides capital to the legal industry or in connection with legal matters directly and through investment in private funds; legal risk management services; lower risk legal finance business focusing on pre-settlement litigation matters with lower risk and lower expected returns; post-settlement finance; and complex strategies in which it acts as a principal and acquires assets that are mispriced. The Asset Management and Other Services segment provides services to the legal industry, including litigation insurance. Burford Capital Limited was incorporated in 2009 and is based in Saint Peter Port, Guernsey.