Analyzing TeraWulf (NASDAQ:WULF) & Burford Capital (NYSE:BUR)

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

Analyst Ratings

This is a summary of recent ratings and target prices for Burford Capital and TeraWulf, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burford Capital	0	0	3	0	3.00
TeraWulf	0	1	7	2	3.10

Burford Capital presently has a consensus target price of $19.50, suggesting a potential upside of 39.48%. TeraWulf has a consensus target price of $7.86, suggesting a potential upside of 144.77%. Given TeraWulf’s stronger consensus rating and higher possible upside, analysts clearly believe TeraWulf is more favorable than Burford Capital.

Insider and Institutional Ownership

62.5% of TeraWulf shares are held by institutional investors. 8.9% of Burford Capital shares are held by company insiders. Comparatively, 24.9% of TeraWulf shares are held 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.

Risk and Volatility

Burford Capital has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, TeraWulf has a beta of 2.76, meaning that its stock price is 176% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Burford Capital	34.81%	8.07%	4.28%
TeraWulf	-41.88%	-15.91%	-11.67%

Earnings and Valuation

This table compares Burford Capital and TeraWulf”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burford Capital	$341.23 million	8.99	$610.52 million	$0.65	21.51
TeraWulf	$140.05 million	8.78	-$73.42 million	($0.20)	-16.05

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

Summary

Burford Capital beats TeraWulf on 8 of the 15 factors compared between the two stocks.

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.

About TeraWulf

TeraWulf Inc., together with its subsidiaries, operates as a digital asset technology company in the United States. The company develops, owns, and operates bitcoin mining facilities in New York and Pennsylvania. It is also involved in the provision of miner hosting services to third-party entities. The company was founded in 2021 and is headquartered in Easton, Maryland.