Financial Analysis: Jefferies Financial Group (NYSE:JEF) versus Orix Corp Ads (NYSE:IX)

Orix Corp Ads (NYSE:IX) and Jefferies Financial Group (NYSE:JEF) are both large-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, risk, profitability, valuation, dividends and earnings.

Risk and Volatility

Orix Corp Ads has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Jefferies Financial Group has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500.

Earnings and Valuation

This table compares Orix Corp Ads and Jefferies Financial Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orix Corp Ads	$22.13 billion	2.00	$2.95 billion	$2.67	14.92
Jefferies Financial Group	$11.85 billion	0.91	$710.47 million	$3.58	15.49

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Orix Corp Ads and Jefferies Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orix Corp Ads	0	1	0	1	3.00
Jefferies Financial Group	0	5	2	0	2.29

Jefferies Financial Group has a consensus target price of $62.62, suggesting a potential upside of 12.92%. Given Jefferies Financial Group’s higher possible upside, analysts plainly believe Jefferies Financial Group is more favorable than Orix Corp Ads.

Profitability

This table compares Orix Corp Ads and Jefferies Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orix Corp Ads	13.55%	9.93%	2.53%
Jefferies Financial Group	7.58%	9.23%	1.31%

Dividends

Orix Corp Ads pays an annual dividend of $0.58 per share and has a dividend yield of 1.5%. Jefferies Financial Group pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. Orix Corp Ads pays out 21.7% of its earnings in the form of a dividend. Jefferies Financial Group pays out 44.7% 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. Jefferies Financial Group has increased its dividend for 2 consecutive years. Jefferies Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

1.7% of Orix Corp Ads shares are held by institutional investors. Comparatively, 60.9% of Jefferies Financial Group shares are held by institutional investors. 0.1% of Orix Corp Ads shares are held by company insiders. Comparatively, 19.9% of Jefferies Financial Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

About Orix Corp Ads

ORIX Corporation provides diversified financial services in Japan, the United States, Asia, Europe, Australasia, and the Middle East. The company's Corporate Financial Services and Maintenance Leasing segment is involved in the finance and fee; leasing and rental of automobiles, electronic measuring instruments, and ICT-related equipment businesses; and provision of life insurance and environment and energy-related products and services. Its Real Estate segment develops, rents, and manages real estate properties; operates facilities; real estate asset management; manages residential condominiums and office building; and provides construction contracting, real estate brokerage, and real estate investment advisory services, as well as operates hotels and Japanese inns. The company's PE Investment and Concession segment engages in the private equity (PE) investment and concession businesses. Its Environment and Energy segment provides renewable energy; ESCO; retails electric power; sells solar panels and battery electricity storage systems; and recycling and waste management services, as well as generates solar power. The company's Insurance segment sells life insurance products through agents, banks, and other financial institutions, as well as face-to-face and online. Its Banking and Credit segment provides banking and consumer finance services. The company's Aircraft and Ships segment engages in the aircraft leasing and management, and ship-related finance and investment businesses. Its ORIX USA segment offers finance, investment, and asset management services. The company's ORIX Europe segment provides equity and fixed income asset management services. Its Asia and Australia segment offers finance and investment businesses. The company was formerly known as Orient Leasing Co., Ltd. and changed its name to ORIX Corporation in 1989. ORIX Corporation was incorporated in 1950 and is headquartered in Tokyo, Japan.

About Jefferies Financial Group

Jefferies Financial Group Inc. operates as an investment banking and capital markets firm in the Americas, Europe, the Middle East, and the Asia-Pacific. The company operates in two segments, Investment Banking and Capital Markets, and Asset Management. It provides investment banking, advisory services with respect to mergers or acquisitions, debt financing, restructurings or recapitalizations, and private capital advisory transactions; underwriting and placement services related to corporate debt, municipal bonds, mortgage-backed and asset-backed securities, equity and equity-linked securities, and loan syndication services; and corporate lending services. The company also offers financing, securities lending, and other prime brokerage services; equities research, sales, and trading services; wealth management services; and online foreign exchange trading services. In addition, it provides investment grade distressed debt securities, U.S. and European government and agency securities, municipal bonds, leveraged loans, emerging markets debt, and interest rate and credit index derivative products; and manages and offers services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1962 and is headquartered in New York, New York.