Financial Analysis: SWK (SWKH) and ORIX (IX)

SWK (OTCMKTS:SWKH) and ORIX (NYSE:IX) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Dividends

ORIX pays an annual dividend of $1.78 per share and has a dividend yield of 2.2%. SWK does not pay a dividend.

Volatility and Risk

SWK has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500. Comparatively, ORIX has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500.

Insider and Institutional Ownership

2.0% of ORIX shares are held by institutional investors. 1.4% of SWK shares are held by company insiders. Comparatively, 0.1% of ORIX shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for SWK and ORIX, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SWK 0 0 0 0 N/A
ORIX 0 0 1 0 3.00

Earnings & Valuation

This table compares SWK and ORIX’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SWK $37.49 million 3.39 $3.04 million N/A N/A
ORIX $25.76 billion 0.80 $2.82 billion N/A N/A

ORIX has higher revenue and earnings than SWK.

Profitability

This table compares SWK and ORIX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SWK 5.69% 7.31% 7.24%
ORIX 11.35% 10.98% 2.68%

Summary

ORIX beats SWK on 8 of the 11 factors compared between the two stocks.

About SWK

SWK Holdings Corporation, a specialized finance company, focuses on the healthcare sector. It intends to provide customized financing solutions to a range of life science companies, including companies in the biotechnology, medical device, medical diagnostics and related tools, animal health, and pharmaceutical industries, as well as institutions and inventors. The company, through its subsidiary, SWK Advisors LLC, offers non-discretionary investment advisory services to institutional clients in separately managed accounts to invest in life science finance. The company was formerly known as Kana Software, Inc. and changed its name to SWK Holdings Corporation in December 2009. SWK Holdings Corporation was founded in 1996 and is headquartered in Dallas, Texas.

About ORIX

ORIX Corporation provides diversified financial services primarily in Japan and the Americas. It operates through six segments: Corporate Financial Services, Maintenance Leasing, Real Estate, Investment and Operation, Retail, and Overseas Business. The Corporate Financial Services segment engages in lending, leasing, and fee businesses. The Maintenance Leasing segment is involved in leasing, automobile rental, and car sharing businesses; lease and rental of precision measuring, information technology related, medical equipment, and environmental analysis equipment, as well as tablet computers; and the sale of software packages and equipment calibration and asset management. The Real Estate segment develops and leases office buildings, commercial properties, logistics centers, and residences; and operates accommodations, aquariums, golf courses, training facilities, senior housings, baseball stadiums, and theaters. This segment also offers REIT asset management and real estate investment advisory services. The Investment and Operation segment is involved in the collection and disposal of waste generated from end-of-lease assets; environment and energy business, such as mega-solar and electric power retailing; and investment in wind power generation and hydropower projects. The Retail segment engages in life insurance, banking, and card loan businesses. The Overseas Business segment is involved in leasing, financing, management, investment, intermediary and sales activities in the field of aircraft and ship. The company was formerly known as Orient Leasing Co., Ltd. and changed its name to ORIX Corporation in 1989. ORIX Corporation was founded in 1964 and is headquartered in Tokyo, Japan.

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