Burke & Herbert Financial Services (NASDAQ:BHRB) & Jefferies Financial Group (NYSE:JEF) Critical Analysis

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

Analyst Recommendations

This is a breakdown of current recommendations for Burke & Herbert Financial Services and Jefferies Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burke & Herbert Financial Services	0	2	2	1	2.80
Jefferies Financial Group	0	3	4	0	2.57

Burke & Herbert Financial Services currently has a consensus target price of $71.50, suggesting a potential upside of 2.48%. Jefferies Financial Group has a consensus target price of $72.71, suggesting a potential upside of 21.07%. Given Jefferies Financial Group’s higher probable upside, analysts clearly believe Jefferies Financial Group is more favorable than Burke & Herbert Financial Services.

Institutional and Insider Ownership

60.9% of Jefferies Financial Group shares are held by institutional investors. 10.9% of Burke & Herbert Financial Services shares are held by insiders. Comparatively, 19.8% of Jefferies Financial Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Burke & Herbert Financial Services has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Jefferies Financial Group has a beta of 1.5, suggesting that its share price is 50% more volatile than the S&P 500.

Valuation & Earnings

This table compares Burke & Herbert Financial Services and Jefferies Financial Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burke & Herbert Financial Services	$491.11 million	2.14	$117.32 million	$7.72	9.04
Jefferies Financial Group	$10.82 billion	1.15	$710.47 million	$2.83	21.22

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

Dividends

Burke & Herbert Financial Services pays an annual dividend of $2.20 per share and has a dividend yield of 3.2%. Jefferies Financial Group pays an annual dividend of $1.60 per share and has a dividend yield of 2.7%. Burke & Herbert Financial Services pays out 28.5% of its earnings in the form of a dividend. Jefferies Financial Group pays out 56.5% 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 and Jefferies Financial Group has raised its dividend for 2 consecutive years. Burke & Herbert Financial Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Burke & Herbert Financial Services	23.89%	15.11%	1.48%
Jefferies Financial Group	6.56%	7.27%	1.07%

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.

About Jefferies Financial Group

Jefferies Financial Group Inc. operates as an investment banking and capital markets firm in the Americas, Europe, the Middle East, and the Asia-Pacific. The company operates in two segments, Investment Banking and Capital Markets, and Asset Management. It provides investment banking, advisory services with respect to mergers or acquisitions, debt financing, restructurings or recapitalizations, and private capital advisory transactions; underwriting and placement services related to corporate debt, municipal bonds, mortgage-backed and asset-backed securities, equity and equity-linked securities, and loan syndication services; and corporate lending services. The company also offers financing, securities lending, and other prime brokerage services; equities research, sales, and trading services; wealth management services; and online foreign exchange trading services. In addition, it provides investment grade distressed debt securities, U.S. and European government and agency securities, municipal bonds, leveraged loans, emerging markets debt, and interest rate and credit index derivative products; and manages and offers services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1962 and is headquartered in New York, New York.