Waddell & Reed Financial (NYSE:WDR) and Freedom (OTCMKTS:FRHC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.
Earnings & Valuation
This table compares Waddell & Reed Financial and Freedom’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Waddell & Reed Financial||$1.16 billion||1.20||$183.58 million||$2.28||7.79|
|Freedom||$55.22 million||8.91||$19.23 million||N/A||N/A|
Waddell & Reed Financial has higher revenue and earnings than Freedom.
This is a breakdown of recent ratings and target prices for Waddell & Reed Financial and Freedom, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Waddell & Reed Financial||4||1||0||0||1.20|
Waddell & Reed Financial currently has a consensus price target of $18.40, suggesting a potential upside of 3.55%. Given Waddell & Reed Financial’s higher possible upside, research analysts plainly believe Waddell & Reed Financial is more favorable than Freedom.
Risk and Volatility
Waddell & Reed Financial has a beta of 1.44, suggesting that its share price is 44% more volatile than the S&P 500. Comparatively, Freedom has a beta of -0.28, suggesting that its share price is 128% less volatile than the S&P 500.
This table compares Waddell & Reed Financial and Freedom’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Waddell & Reed Financial||15.82%||20.81%||14.21%|
Insider and Institutional Ownership
98.2% of Waddell & Reed Financial shares are owned by institutional investors. 3.4% of Waddell & Reed Financial shares are owned by company insiders. Comparatively, 82.1% of Freedom shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Waddell & Reed Financial pays an annual dividend of $1.00 per share and has a dividend yield of 5.6%. Freedom does not pay a dividend. Waddell & Reed Financial pays out 43.9% of its earnings in the form of a dividend.
Waddell & Reed Financial beats Freedom on 9 of the 12 factors compared between the two stocks.
Waddell & Reed Financial Company Profile
Waddell & Reed Financial, Inc., through its subsidiaries, provides investment management and advisory, investment product underwriting and distribution, and shareholder services administration to mutual funds, and institutional and separately managed accounts in the United States. The company acts as an investment adviser for institutional and other private investors, and provides sub advisory services to other investment companies; and underwrites and distributes registered open-end mutual fund portfolios. It also offers fee-based asset allocation investment advisory products to advisors channel customers; distributes business partners' variable annuity products, and retirement and life insurance products to advisors channel customers; and sells life insurance and disability products underwritten by various carriers. The company distributes investment products through its wholesale channel comprising other broker/dealers, various retirement platforms, and registered investment advisors, as well as through independent financial advisors; and markets investment advisory services to institutional investors directly or through consultants. Waddell & Reed Financial, Inc. was founded in 1937 and is based in Overland Park, Kansas.
Freedom Company Profile
Freedom Holding Corp., through its subsidiaries, provides retail securities brokerage, investment research and counseling, securities trading, market making, corporate investment banking, and underwriting services. The company offers investment brokerage services for exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, exchange traded options and futures contracts, government bonds, and mutual funds; capital raising solutions for corporate clients through initial public offerings, follow-on offerings, and private investments in public entities; and debt capital markets solutions for emerging growth and small market companies, and financial sponsors. It has operations primarily in Russia, Kazakhstan, Ukraine, Uzbekistan, Kyrgyzstan, and Cyprus. The company was formerly known as BMB Munai, Inc. and changed its name to Freedom Holding Corp. Freedom Holding Corp. was incorporated in 1981 and is headquartered in Almaty, Kazakhstan.
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