Lazard (NYSE: LAZ) and JMP Group (NYSE:JMP) are both financials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Lazard and JMP Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lazard 0 3 4 0 2.57
JMP Group 0 0 0 0 N/A

Lazard currently has a consensus price target of $46.17, suggesting a potential upside of 0.30%. JMP Group has a consensus price target of $5.75, suggesting a potential upside of 2.68%. Given JMP Group’s higher possible upside, analysts plainly believe JMP Group is more favorable than Lazard.

Risk and Volatility

Lazard has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500. Comparatively, JMP Group has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Profitability

This table compares Lazard and JMP Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lazard 16.56% 40.30% 10.59%
JMP Group -21.24% -31.36% -3.50%

Insider and Institutional Ownership

72.2% of Lazard shares are owned by institutional investors. Comparatively, 13.0% of JMP Group shares are owned by institutional investors. 2.5% of Lazard shares are owned by company insiders. Comparatively, 52.1% of JMP Group 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.

Dividends

Lazard pays an annual dividend of $1.64 per share and has a dividend yield of 3.6%. JMP Group pays an annual dividend of $0.36 per share and has a dividend yield of 6.4%. Lazard pays out 46.5% of its earnings in the form of a dividend. JMP Group pays out -66.7% 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. Lazard has increased its dividend for 6 consecutive years and JMP Group has increased its dividend for 7 consecutive years. JMP Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Lazard and JMP Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lazard $2.64 billion 2.12 $429.28 million $3.53 13.04
JMP Group $119.55 million 1.01 -$11.63 million ($0.54) -10.37

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

Summary

Lazard beats JMP Group on 10 of the 16 factors compared between the two stocks.

About Lazard

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.

About JMP Group

JMP Group LLC, formerly JMP Group, Inc., is a full-service investment banking and asset management firm. The Company operates in five segments: Broker-Dealer, Asset Management, Corporate Credit, Investment Income and Corporate Costs. The Broker-Dealer segment includes a range of services, such as underwriting and acting as a placement agent for public and private capital markets raising transactions and financial advisory services in mergers and acquisitions, restructuring and other strategic transactions. The Asset Management segment includes the management of a range of pooled investment vehicles. The Corporate Credit segment includes the management of collateralized loan obligations and small business loans. The Investment Income segment includes income from the Company’s principal investments in public and private securities.

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