JMP Group (NYSE: JMP) and Moelis & (NYSE:MC) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitabiliy, analyst recommendations, earnings, dividends and risk.
Volatility & Risk
JMP Group has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Moelis & has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500.
JMP Group pays an annual dividend of $0.36 per share and has a dividend yield of 6.7%. Moelis & pays an annual dividend of $1.48 per share and has a dividend yield of 3.8%. JMP Group pays out -66.7% of its earnings in the form of a dividend. Moelis & pays out 74.0% 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. JMP Group has raised its dividend for 2 consecutive years and Moelis & has raised its dividend for 7 consecutive years. JMP Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares JMP Group and Moelis &’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
13.6% of JMP Group shares are owned by institutional investors. Comparatively, 90.9% of Moelis & shares are owned by institutional investors. 52.1% of JMP Group shares are owned by insiders. Comparatively, 64.5% of Moelis & shares are owned 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.
Valuation and Earnings
This table compares JMP Group and Moelis &’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|JMP Group||$119.46 million||0.98||-$11.70 million||($0.54)||-9.96|
|Moelis &||$700.69 million||1.53||$55.04 million||$2.00||19.53|
Moelis & has higher revenue and earnings than JMP Group. JMP Group is trading at a lower price-to-earnings ratio than Moelis &, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for JMP Group and Moelis &, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Moelis & has a consensus target price of $37.57, indicating a potential downside of 3.79%. Given Moelis &’s higher probable upside, analysts plainly believe Moelis & is more favorable than JMP Group.
Moelis & beats JMP Group on 13 of the 16 factors compared between the two stocks.
JMP Group Company Profile
JMP Group, Inc. is a full-service investment banking and asset management firm. The Company operates in five segments: Broker-Dealer, Asset Management, Corporate Credit, Investment Income and Corporate Costs. The Broker-Dealer segment includes a range of services, such as underwriting and acting as a placement agent for public and private capital markets raising transactions and financial advisory services in mergers and acquisitions, restructuring and other strategic transactions. The Asset Management segment includes the management of a range of pooled investment vehicles. The Corporate Credit segment includes the management of collateralized loan obligations and small business loans. The Investment Income segment includes income from the Company’s principal investments in public and private securities. The Corporate Costs segment includes expenses related to JMP Group Inc., the holding company, and JMP Group LLC, and comprises corporate overhead expenses and interest expense.
Moelis & Company Profile
Moelis & Company is an investment banking advisory company. The Company provides strategic and financial advice to a client base, including corporations, governments and financial sponsors. The Company offers financial advisory services across various industry sectors. It advices its clients on decisions, including mergers and acquisitions (M&A), recapitalizations and restructurings, and other corporate finance matters. With 17 offices located in North and South America, Europe, the Middle East, Asia and Australia, the Company provided information flow and cross-border solutions as of December 31, 2016. The Company offers advisory services in all industries, including consumer, retail and restaurants; energy, power and infrastructure; financial institutions; financial sponsors; general industrials; healthcare; real estate, gaming, lodging and leisure, and technology, media and telecommunications. It advises clients on all aspects of public and private debt and equity transactions.
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