Financial Survey: LPL Financial (LPLA) & Jefferies Group (JEF)

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

Profitability

This table compares LPL Financial and Jefferies Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LPL Financial 5.19% 26.03% 4.72%
Jefferies Group N/A N/A N/A

Valuation and Earnings

This table compares LPL Financial and Jefferies Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LPL Financial $4.05 billion 1.27 $191.93 million $2.35 24.31
Jefferies Group N/A N/A N/A $1.09 N/A

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

Institutional & Insider Ownership

90.3% of LPL Financial shares are owned by institutional investors. 4.0% of LPL Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

LPL Financial pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Jefferies Group does not pay a dividend. LPL Financial pays out 42.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and target prices for LPL Financial and Jefferies Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LPL Financial 1 1 6 1 2.78
Jefferies Group 0 0 0 0 N/A

LPL Financial currently has a consensus target price of $58.00, suggesting a potential upside of 1.51%.

Summary

LPL Financial beats Jefferies Group on 10 of the 11 factors compared between the two stocks.

LPL Financial Company Profile

LPL Financial Holdings Inc. is a broker-dealer, a custodian for registered investment advisors and an independent consultant to retirement plans. The Company provides a platform of brokerage and investment advisory services to independent financial advisors, including financial advisors at financial institutions across the country. It also supported approximately 4,000 financial advisors, affiliated and licensed with insurance companies through customized clearing services, advisory platforms and technology solutions, as of December 31, 2016. Through its advisors, it is a distributor of financial products and services in the United States. It provides its technology and service to advisors through a technology platform that is server-based and Web-accessible. Its technology offerings are designed to permit its advisors to manage various aspects of their businesses. It automates time-consuming processes, such as account opening and management, document imaging and account rebalancing.

Jefferies Group Company Profile

Jefferies Group LLC and its subsidiaries operate as a securities and investment banking firm. The Company operates in two business segments: Capital Markets segment consists of the Company’s securities and commodities trading activities and its investment banking activities, and Asset Management segment includes asset management activities and related services. On July 1, 2011, the Company acquired the Bache Global Commodities Group from Prudential Financial, Inc., and as of November 30, 2011, the Company operated a futures commission merchant through Jefferies Bache, LLC in the United States and a global commodities and financial derivatives broker through Jefferies Bache Limited in the United Kingdom. Effective March 1, 2013, Leucadia National Corp (Leucadia) acquired the remaining 71.4% interest in Jefferies Group Inc . Effective March 1, 2013, Leucadia National Corp (Leucadia) acquired the remaining 71.4% interest in Jefferies Group Inc.

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