Critical Analysis: Burford Capital (NYSE:BUR) & Greystone Housing Impact Investors (NYSE:GHI)

Burford Capital (NYSE:BUR) and Greystone Housing Impact Investors (NYSE:GHI) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Insider & Institutional Ownership

9.0% of Greystone Housing Impact Investors shares are held by institutional investors. 0.2% of Burford Capital shares are held by insiders. Comparatively, 1.3% of Greystone Housing Impact Investors shares are held by 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.

Profitability

This table compares Burford Capital and Greystone Housing Impact Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burford Capital	42.81%	10.61%	5.70%
Greystone Housing Impact Investors	45.87%	11.65%	2.51%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Burford Capital and Greystone Housing Impact Investors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burford Capital	0	0	3	0	3.00
Greystone Housing Impact Investors	0	0	3	0	3.00

Burford Capital presently has a consensus target price of $20.17, indicating a potential upside of 51.29%. Greystone Housing Impact Investors has a consensus target price of $17.33, indicating a potential upside of 26.38%. Given Burford Capital’s higher probable upside, research analysts clearly believe Burford Capital is more favorable than Greystone Housing Impact Investors.

Earnings and Valuation

This table compares Burford Capital and Greystone Housing Impact Investors’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burford Capital	$563.24 million	5.18	$610.52 million	$1.43	9.32
Greystone Housing Impact Investors	$52.10 million	6.13	$54.01 million	$1.89	7.26

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

Risk & Volatility

Burford Capital has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500. Comparatively, Greystone Housing Impact Investors has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Dividends

Burford Capital pays an annual dividend of $0.12 per share and has a dividend yield of 0.9%. Greystone Housing Impact Investors pays an annual dividend of $1.48 per share and has a dividend yield of 10.8%. Burford Capital pays out 8.4% of its earnings in the form of a dividend. Greystone Housing Impact Investors pays out 78.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Greystone Housing Impact Investors has raised its dividend for 4 consecutive years. Greystone Housing Impact Investors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Greystone Housing Impact Investors beats Burford Capital on 9 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 Greystone Housing Impact Investors

Greystone Housing Impact Investors LP acquires, holds, sells, and deals in a portfolio of mortgage revenue bonds (MRBs) that are issued to provide construction and/or permanent financing for multifamily, student, and senior citizen housing; skilled nursing properties; and commercial properties in the United States. The company operates in four segments: Affordable Multifamily MRB Investments; Seniors and Skilled Nursing MRB Investments; MF Properties; Market-Rate Joint Venture Investments. It also invests in governmental issuer loans. The company was formerly known as America First Multifamily Investors, L.P. and changed its name to Greystone Housing Impact Investors LP in December 2022. Greystone Housing Impact Investors LP was incorporated in 1998 and is based in Omaha, Nebraska.