Reviewing Cowen Group (COWN) and E*TRADE Financial Corporation (ETFC)
Cowen Group (NASDAQ: COWN) and E*TRADE Financial Corporation (NASDAQ:ETFC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitabiliy.
This is a summary of recent ratings for Cowen Group and E*TRADE Financial Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|E*TRADE Financial Corporation||0||5||11||0||2.69|
Cowen Group currently has a consensus target price of $17.00, suggesting a potential upside of 5.59%. E*TRADE Financial Corporation has a consensus target price of $36.00, suggesting a potential downside of 6.95%. Given Cowen Group’s higher possible upside, analysts plainly believe Cowen Group is more favorable than E*TRADE Financial Corporation.
Insider and Institutional Ownership
88.9% of Cowen Group shares are owned by institutional investors. Comparatively, 92.1% of E*TRADE Financial Corporation shares are owned by institutional investors. 4.9% of Cowen Group shares are owned by company insiders. Comparatively, 0.2% of E*TRADE Financial Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Cowen Group and E*TRADE Financial Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cowen Group||$399.60 million||1.09||-$19.55 million||($0.72)||-22.36|
|E*TRADE Financial Corporation||$2.15 billion||4.95||$530.51 million||$1.93||20.05|
E*TRADE Financial Corporation has higher revenue and earnings than Cowen Group. Cowen Group is trading at a lower price-to-earnings ratio than E*TRADE Financial Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Cowen Group and E*TRADE Financial Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|E*TRADE Financial Corporation||26.90%||9.09%||1.06%|
Risk and Volatility
Cowen Group has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500. Comparatively, E*TRADE Financial Corporation has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.
E*TRADE Financial Corporation beats Cowen Group on 10 of the 13 factors compared between the two stocks.
About Cowen Group
Cowen Inc., formerly Cowen Group, Inc., is a financial services company. The Company provides alternative investment management, investment banking, research, sales and trading, and prime brokerage services. It operates through two segments: alternative investment and broker-dealer. The alternative investment segment includes private equity structures, registered investment companies and listed investment vehicles. The broker-dealer segment offers industry focused investment banking for growth-oriented companies, including advisory and global capital markets origination and domain knowledge-driven research, and a sales and trading platform for institutional investors. Its alternative investment platform, which operates under the Ramius name, offers investment products and solutions across the liquidity spectrum to institutional and private clients. Ramius offers investors access to strategies to meet their specific needs, including long/short equity and event driven equity.
About E*TRADE Financial Corporation
E*Trade Financial Corporation is a financial services company. The Company provides online brokerage and related products and services primarily to individual retail investors under the brand E*TRADE Financial. The Company also provides investor-focused banking products, primarily sweep deposits, to retail investors. It provides its services to customers through its digital platforms and network of industry-licensed customer service representatives and Financial Consultants, over the phone and by e-mail. The Company’s brokerage business is organized into three product areas: Trading, Investing, and Corporate Services. The Company’s Trading products deliver automated trade order placement and execution services. The Company’s Investing products help investors build wealth and address their long-term investing needs. The Company’s Corporate Services channel provides stock plan administration services for both public and private companies.
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