Head-To-Head Contrast: Capital Financial (OTCMKTS:CPFH) vs. LPL Financial (NASDAQ:LPLA)

Capital Financial (OTCMKTS:CPFH) and LPL Financial (NASDAQ:LPLA) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Valuation & Earnings

This table compares Capital Financial and LPL Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Financial	N/A	N/A	N/A	N/A	N/A
LPL Financial	$15.57 billion	1.95	$1.06 billion	$10.86	34.86

LPL Financial has higher revenue and earnings than Capital Financial.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Capital Financial and LPL Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Financial	0	0	0	0	0.00
LPL Financial	0	7	9	1	2.65

LPL Financial has a consensus target price of $429.07, indicating a potential upside of 13.32%. Given LPL Financial’s stronger consensus rating and higher possible upside, analysts clearly believe LPL Financial is more favorable than Capital Financial.

Profitability

This table compares Capital Financial and LPL Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital Financial	N/A	N/A	N/A
LPL Financial	5.35%	36.80%	9.48%

Insider and Institutional Ownership

95.7% of LPL Financial shares are held by institutional investors. 54.0% of Capital Financial shares are held by company insiders. Comparatively, 1.3% of LPL Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

LPL Financial beats Capital Financial on 9 of the 10 factors compared between the two stocks.

About Capital Financial

Capital Financial Holdings, Inc., a full-service brokerage company, provides investment products and services to independent investment representatives, financial planners, and investment advisors in the United States. It offers mutual funds, insurance products, and various other securities, as well as investment advisory services. The company was formerly known as Integrity Mutual Funds, Inc. and changed its name to Capital Financial Holdings, Inc. in May 2009. Capital Financial Holdings, Inc. was founded in 1987 and is headquartered in Minot, North Dakota.

About LPL Financial

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at enterprises in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, fixed income, alternative investments, retirement and 529 education savings plans, and insurance. The company also provides fee-based platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market products; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.