Cowen Group (COWN) and The Charles Schwab Corporation (SCHW) Critical Analysis
Cowen Group (NASDAQ: COWN) and The Charles Schwab Corporation (NYSE:SCHW) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.
Risk & Volatility
Cowen Group has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500. Comparatively, The Charles Schwab Corporation has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500.
This table compares Cowen Group and The Charles Schwab Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Charles Schwab Corporation||26.73%||15.41%||0.98%|
Insider & Institutional Ownership
81.3% of Cowen Group shares are held by institutional investors. Comparatively, 79.5% of The Charles Schwab Corporation shares are held by institutional investors. 6.2% of Cowen Group shares are held by company insiders. Comparatively, 12.0% of The Charles Schwab Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of current recommendations and price targets for Cowen Group and The Charles Schwab Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Charles Schwab Corporation||0||6||10||0||2.63|
Cowen Group currently has a consensus price target of $17.67, suggesting a potential upside of 11.46%. The Charles Schwab Corporation has a consensus price target of $44.27, suggesting a potential upside of 11.33%. Given Cowen Group’s higher probable upside, equities research analysts clearly believe Cowen Group is more favorable than The Charles Schwab Corporation.
Earnings and Valuation
This table compares Cowen Group and The Charles Schwab Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cowen Group||$444.43 million||1.10||-$2.78 million||($0.09)||-176.09|
|The Charles Schwab Corporation||$8.08 billion||6.59||$2.00 billion||$1.49||26.68|
The Charles Schwab Corporation has higher revenue and earnings than Cowen Group. Cowen Group is trading at a lower price-to-earnings ratio than The Charles Schwab Corporation, indicating that it is currently the more affordable of the two stocks.
The Charles Schwab Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Cowen Group does not pay a dividend. The Charles Schwab Corporation pays out 21.5% of its earnings in the form of a dividend.
The Charles Schwab Corporation beats Cowen Group on 11 of the 15 factors compared between the two stocks.
About Cowen Group
Cowen Inc., formerly Cowen Group, Inc., is a financial services company. The Company provides alternative investment management, investment banking, research, sales and trading, and prime brokerage services. It operates through two segments: alternative investment and broker-dealer. The alternative investment segment includes private equity structures, registered investment companies and listed investment vehicles. The broker-dealer segment offers industry focused investment banking for growth-oriented companies, including advisory and global capital markets origination and domain knowledge-driven research, and a sales and trading platform for institutional investors. Its alternative investment platform, which operates under the Ramius name, offers investment products and solutions across the liquidity spectrum to institutional and private clients. Ramius offers investors access to strategies to meet their specific needs, including long/short equity and event driven equity.
About The Charles Schwab Corporation
The Charles Schwab Corporation (CSC) is a savings and loan holding company. The Company, through its subsidiaries, engages in wealth management, securities brokerage, banking, money management and financial advisory services. The Company provides financial services to individuals and institutional clients through two segments: Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services, retirement plan services and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services. The Company offers a range of products to address individuals’ varying investment and financial needs. Its product offerings include brokerage, mutual funds, ETFs, advice solutions, banking and trust. Brokerage provides a range of brokerage accounts with cash management capabilities. Mutual funds offer third-party mutual funds through the Mutual Fund Marketplace.
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