Greenhill & Co. (NYSE: GHL) and Lazard (NYSE:LAZ) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Volatility & Risk

Greenhill & Co. has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Lazard has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500.

Earnings and Valuation

This table compares Greenhill & Co. and Lazard’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Greenhill & Co. $299.08 million 1.65 $39.42 million $1.33 12.48
Lazard $2.64 billion 2.22 $458.07 million $3.53 12.81

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

Profitability

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

Net Margins Return on Equity Return on Assets
Greenhill & Co. 13.98% 15.68% 10.43%
Lazard 17.39% 39.33% 11.16%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Greenhill & Co. and Lazard, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Greenhill & Co. 5 2 0 0 1.29
Lazard 0 3 4 0 2.57

Greenhill & Co. currently has a consensus target price of $19.71, suggesting a potential upside of 18.76%. Lazard has a consensus target price of $46.29, suggesting a potential upside of 2.36%. Given Greenhill & Co.’s higher probable upside, analysts plainly believe Greenhill & Co. is more favorable than Lazard.

Dividends

Greenhill & Co. pays an annual dividend of $1.80 per share and has a dividend yield of 10.8%. Lazard pays an annual dividend of $1.64 per share and has a dividend yield of 3.6%. Greenhill & Co. pays out 135.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lazard pays out 46.5% of its earnings in the form of a dividend. Lazard has raised its dividend for 6 consecutive years.

Insider and Institutional Ownership

97.1% of Greenhill & Co. shares are held by institutional investors. Comparatively, 72.2% of Lazard shares are held by institutional investors. 8.3% of Greenhill & Co. shares are held by company insiders. Comparatively, 2.5% of Lazard shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Lazard beats Greenhill & Co. on 12 of the 17 factors compared between the two stocks.

Greenhill & Co. Company Profile

Greenhill & Co., Inc. is an investment bank. The Company provides financial and strategic advice on domestic and cross-border mergers and acquisitions, divestitures, restructurings, financings, capital raising and other transactions to a diverse client base, including corporations, partnerships, institutions and governments globally. The Company also provides advice in connection with defense preparedness, activist response strategies and other mission critical situations. The Company acts for clients located across the world from its offices located in the United States, Australia, Brazil, Canada, Germany, Hong Kong, Japan, Sweden, and the United Kingdom. The Company’s subsidiaries provide advisory services in various jurisdictions. Its operating entities include Greenhill & Co., LLC (G&Co), Greenhill & Co. International LLP (GCI), Greenhill & Co. Europe LLP (GCE), Greenhill & Co. Australia Pty Limited (Greenhill Australia) and Greenhill Cogent, LP (GC LP).

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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