Stifel Financial Corporation (NYSE: SF) and FXCM (NASDAQ:GLBR) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitabiliy, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

86.2% of Stifel Financial Corporation shares are held by institutional investors. Comparatively, 24.1% of FXCM shares are held by institutional investors. 5.1% of Stifel Financial Corporation shares are held by insiders. Comparatively, 9.0% of FXCM 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 Stifel Financial Corporation and FXCM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stifel Financial Corporation 6.03% 9.40% 1.32%
FXCM -3.49% -81.10% 6.13%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Stifel Financial Corporation and FXCM, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stifel Financial Corporation 0 6 0 0 2.00
FXCM 0 0 0 0 N/A

Stifel Financial Corporation currently has a consensus target price of $52.60, suggesting a potential upside of 5.24%. Given Stifel Financial Corporation’s higher probable upside, research analysts clearly believe Stifel Financial Corporation is more favorable than FXCM.

Valuation and Earnings

This table compares Stifel Financial Corporation and FXCM’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stifel Financial Corporation $2.69 billion 1.27 $132.11 million $1.93 25.90
FXCM $270.43 million 0.04 $17.84 million ($1.13) -1.68

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

Volatility and Risk

Stifel Financial Corporation has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500. Comparatively, FXCM has a beta of -0.08, indicating that its stock price is 108% less volatile than the S&P 500.

Summary

Stifel Financial Corporation beats FXCM on 9 of the 11 factors compared between the two stocks.

Stifel Financial Corporation Company Profile

Stifel Financial Corp. is a financial holding company. Its principal subsidiary is Stifel, Nicolaus & Company, Incorporated, a retail and institutional wealth management and investment banking firm. It operates through three segments: Global Wealth Management, Institutional Group and Other. The Global Wealth Management segment consists of the Private Client Group and Stifel Bank businesses. The Institutional Group segment includes research, equity and fixed income institutional sales and trading, investment banking, public finance and syndicate. The Other segment includes interest income from stock borrow activities and interest income. Its principal activities are private client services, including securities transaction and financial planning services; institutional equity and fixed income sales, trading, research and municipal finance; investment banking services, and retail and commercial banking, including personal and commercial lending programs.

FXCM Company Profile

Global brokerage, Inc., formerly FXCM Inc. (FXCM), is engaged in providing online foreign exchange (FX) trading, contract for difference (CFD) trading, spread betting and related services. The Company owns over 50% of FXCM Group, LLC (FXCM Group). FXCM Group is a holding company of Forex Capital Markets LLC, (FXCM US), Forex Capital Markets Limited, inclusive of all EU branches (FXCM UK), FXCM Australia Pty. Limited, (FXCM AU). The Company focuses on providing global traders with access to market by offering trading tools, hiring trading educators. In addition, FXCM offers educational courses on FX trading and provides trading tools data and resources. FXCM Pro provides retail brokers, small hedge funds and market banks access to wholesale execution and liquidity, as well as providing high and medium frequency funds access to prime brokerage services through FXCM Prime.

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