Moelis & (NYSE: MC) and Lazard (NYSE:LAZ) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitabiliy, dividends, risk, institutional ownership, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and target prices for Moelis & and Lazard, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Moelis & 0 3 4 0 2.57
Lazard 0 3 4 0 2.57

Moelis & currently has a consensus price target of $37.57, suggesting a potential downside of 6.19%. Lazard has a consensus price target of $46.29, suggesting a potential upside of 1.77%. Given Lazard’s higher probable upside, analysts clearly believe Lazard is more favorable than Moelis &.

Profitability

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

Net Margins Return on Equity Return on Assets
Moelis & 8.50% 53.43% 25.58%
Lazard 17.39% 39.33% 11.16%

Valuation and Earnings

This table compares Moelis & and Lazard’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Moelis & $700.69 million 1.53 $53.40 million $2.00 20.03
Lazard $2.64 billion 2.11 $431.96 million $3.53 12.88

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

Dividends

Moelis & pays an annual dividend of $1.48 per share and has a dividend yield of 3.7%. Lazard pays an annual dividend of $1.64 per share and has a dividend yield of 3.6%. Moelis & pays out 74.0% of its earnings in the form of a dividend. Lazard pays out 46.5% 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 6 consecutive years and Lazard has increased its dividend for 2 consecutive years. Moelis & is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Moelis & has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500. Comparatively, Lazard has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500.

Insider and Institutional Ownership

93.9% of Moelis & shares are owned by institutional investors. Comparatively, 73.7% of Lazard shares are owned by institutional investors. 64.5% of Moelis & shares are owned by company insiders. Comparatively, 2.5% of Lazard shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Moelis & beats Lazard on 8 of the 15 factors compared between the two stocks.

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.

Lazard Company Profile

Lazard Ltd (Lazard) is a financial advisory and asset management company. The Company operates through two segments: Financial Advisory and Asset Management. It serves a range of clients around the world, including corporations, governments, institutions, partnerships and individuals. The Financial Advisory business segment offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a range of financial advisory services regarding mergers and acquisitions (M&A) and other strategic matters, restructurings, capital structure, capital raising and various other financial matters to corporate, partnership, institutional, government, sovereign and individual clients. The Asset Management business provides investment solutions and investment management services in equity and fixed income strategies, alternative investments and private equity funds to corporations, public funds and sovereign entities.

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