Moelis & Company (NYSE: MC) and Lazard (NYSE:LAZ) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, dividends, valuation, institutional ownership, earnings, profitabiliy and risk.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Moelis & Company and Lazard, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Moelis & Company 0 3 2 0 2.40
Lazard 0 3 4 0 2.57

Moelis & Company presently has a consensus target price of $33.20, suggesting a potential downside of 14.54%. Lazard has a consensus target price of $46.29, suggesting a potential downside of 0.65%. Given Lazard’s stronger consensus rating and higher possible upside, analysts plainly believe Lazard is more favorable than Moelis & Company.

Dividends

Moelis & Company pays an annual dividend of $1.48 per share and has a dividend yield of 3.8%. Lazard pays an annual dividend of $1.64 per share and has a dividend yield of 3.5%. Moelis & Company pays out 86.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lazard pays out 50.8% of its earnings in the form of a dividend. Moelis & Company has increased its dividend for 6 consecutive years and Lazard has increased its dividend for 2 consecutive years. Moelis & Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Moelis & Company and Lazard’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Moelis & Company 7.07% 46.73% 22.83%
Lazard 17.06% 36.15% 10.38%

Insider and Institutional Ownership

94.2% of Moelis & Company shares are owned by institutional investors. Comparatively, 73.9% of Lazard shares are owned by institutional investors. 64.5% of Moelis & Company shares are owned by company insiders. Comparatively, 2.5% of Lazard shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Moelis & Company has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500. Comparatively, Lazard has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500.

Valuation and Earnings

This table compares Moelis & Company and Lazard’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Moelis & Company $660.27 million 1.57 $45.90 million $1.72 22.59
Lazard $2.45 billion 2.47 $419.14 million $3.23 14.42

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

Summary

Lazard beats Moelis & Company on 9 of the 17 factors compared between the two stocks.

Moelis & Company Company Profile

Moelis & Company is an investment banking advisory company. The Company provides strategic and financial advice to a client base, including corporations, governments and financial sponsors. The Company offers financial advisory services across various industry sectors. It advices its clients on decisions, including mergers and acquisitions (M&A), recapitalizations and restructurings, and other corporate finance matters. With 17 offices located in North and South America, Europe, the Middle East, Asia and Australia, the Company provided information flow and cross-border solutions as of December 31, 2016. The Company offers advisory services in all industries, including consumer, retail and restaurants; energy, power and infrastructure; financial institutions; financial sponsors; general industrials; healthcare; real estate, gaming, lodging and leisure, and technology, media and telecommunications. It advises clients on all aspects of public and private debt and equity transactions.

Lazard Company Profile

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.

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