Raymond James Financial (NYSE: RJF) and Piper Jaffray (NYSE:PJC) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, analyst recommendations, institutional ownership and earnings.

Analyst Ratings

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This is a summary of recent recommendations and price targets for Raymond James Financial and Piper Jaffray, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Raymond James Financial 0 2 5 0 2.71
Piper Jaffray 1 4 1 0 2.00

Raymond James Financial presently has a consensus target price of $101.14, suggesting a potential upside of 16.23%. Piper Jaffray has a consensus target price of $30.93, suggesting a potential downside of 62.25%. Given Raymond James Financial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Raymond James Financial is more favorable than Piper Jaffray.

Profitability

This table compares Raymond James Financial and Piper Jaffray’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Raymond James Financial 9.00% 14.87% 2.42%
Piper Jaffray -7.30% 11.58% 4.72%

Earnings and Valuation

This table compares Raymond James Financial and Piper Jaffray’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Raymond James Financial $6.52 billion 1.94 $636.23 million $5.23 16.64
Piper Jaffray $895.19 million 1.39 -$61.93 million N/A N/A

Raymond James Financial has higher revenue and earnings than Piper Jaffray.

Dividends

Raymond James Financial pays an annual dividend of $1.00 per share and has a dividend yield of 1.1%. Piper Jaffray pays an annual dividend of $1.50 per share and has a dividend yield of 1.8%. Raymond James Financial pays out 19.1% of its earnings in the form of a dividend. Raymond James Financial has increased its dividend for 5 consecutive years.

Insider and Institutional Ownership

71.0% of Raymond James Financial shares are held by institutional investors. Comparatively, 70.2% of Piper Jaffray shares are held by institutional investors. 10.5% of Raymond James Financial shares are held by company insiders. Comparatively, 4.2% of Piper Jaffray shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Raymond James Financial has a beta of 1.6, suggesting that its stock price is 60% more volatile than the S&P 500. Comparatively, Piper Jaffray has a beta of 1.54, suggesting that its stock price is 54% more volatile than the S&P 500.

Summary

Raymond James Financial beats Piper Jaffray on 13 of the 16 factors compared between the two stocks.

About Raymond James Financial

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment provides corporate loans, SBL, tax-exempt loans, and residential loans. The Other segment engages in private equity activities, including various direct and third party private equity investments; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is based in St. Petersburg, Florida.

About Piper Jaffray

Piper Jaffray Companies is an investment bank and asset management company. The Company’s segments include Capital Markets and Asset Management. The Capital Markets segment provides investment banking and institutional sales, trading and research services for various equity and fixed income products. The Asset Management segment includes its traditional asset management business and its investments in registered funds and private funds or partnerships that it manages. It provides a range of products and services, including equity and debt capital markets products; public finance services; financial advisory services; equity and fixed income institutional brokerage; equity and fixed income research, and asset management services. The Company serves the needs of corporations, private equity groups, public entities, non-profit entities and institutional investors in the United States and internationally.

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