Analyzing Moelis & (MC) and FBR & Co (FBRC)

FBR & Co (NASDAQ: FBRC) and Moelis & (NYSE:MC) are both financials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for FBR & Co and Moelis &, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FBR & Co 0 1 0 0 2.00
Moelis & 0 3 4 0 2.57

Moelis & has a consensus price target of $37.57, indicating a potential downside of 1.90%. Given Moelis &’s stronger consensus rating and higher possible upside, analysts clearly believe Moelis & is more favorable than FBR & Co.

Profitability

This table compares FBR & Co and Moelis &’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FBR & Co 3.49% 4.34% 0.49%
Moelis & 8.50% 52.98% 24.68%

Dividends

FBR & Co pays an annual dividend of $0.80 per share and has a dividend yield of 4.6%. Moelis & pays an annual dividend of $1.48 per share and has a dividend yield of 3.9%. FBR & Co pays out -8.9% 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. Moelis & has increased its dividend for 2 consecutive years. FBR & Co is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares FBR & Co and Moelis &’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FBR & Co N/A N/A N/A ($9.00) -1.95
Moelis & $700.69 million 1.50 $55.04 million $2.00 19.15

Moelis & has higher revenue and earnings than FBR & Co. FBR & Co is trading at a lower price-to-earnings ratio than Moelis &, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

FBR & Co has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Moelis & has a beta of 1.87, suggesting that its share price is 87% more volatile than the S&P 500.

Insider & Institutional Ownership

72.4% of FBR & Co shares are held by institutional investors. Comparatively, 89.6% of Moelis & shares are held by institutional investors. 13.9% of FBR & Co shares are held by insiders. Comparatively, 64.5% of Moelis & shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Moelis & beats FBR & Co on 12 of the 14 factors compared between the two stocks.

FBR & Co Company Profile

FBR & Co. is an investment banking and institutional brokerage company. The Company focuses on the equity capital markets. The Company operates through two segments: capital markets, which includes investment banking, institutional brokerage and research, and principal investing. Through its broker-dealer operating subsidiaries, the Company focuses its business on providing: capital raising services, including underwriting and placement of public and private equity, equity-linked and debt securities; financial advisory services, including merger and acquisition (M&A) advisory, restructuring, liability management, recapitalization and strategic alternative analysis; institutional sales and trading services focused on equities, equity-linked securities, listed options, high-yield bonds, senior debt and bank loans, as well as securities lending activities, and differentiated securities research.

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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