FBR & Co (NASDAQ: FBRC) and Piper Jaffray Companies (NYSE:PJC) are both financials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, analyst recommendations, profitabiliy, risk and earnings.

Analyst Ratings

This is a summary of recent ratings and target prices for FBR & Co and Piper Jaffray Companies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FBR & Co 0 1 0 0 2.00
Piper Jaffray Companies 2 2 0 0 1.50

Piper Jaffray Companies has a consensus target price of $21.75, suggesting a potential downside of 66.02%. Given Piper Jaffray Companies’ higher possible upside, analysts clearly believe Piper Jaffray Companies is more favorable than FBR & Co.

Valuation & Earnings

This table compares FBR & Co and Piper Jaffray Companies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FBR & Co N/A N/A N/A ($9.00) -1.95
Piper Jaffray Companies $794.32 million 1.21 -$13.10 million ($0.87) -73.56

FBR & Co has higher revenue, but lower earnings than Piper Jaffray Companies. Piper Jaffray Companies is trading at a lower price-to-earnings ratio than FBR & Co, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares FBR & Co and Piper Jaffray Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FBR & Co 3.49% 4.34% 0.49%
Piper Jaffray Companies -0.80% 8.84% 3.41%

Risk & Volatility

FBR & Co has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, Piper Jaffray Companies has a beta of 1.44, indicating that its share price is 44% more volatile than the S&P 500.

Insider and Institutional Ownership

72.4% of FBR & Co shares are owned by institutional investors. Comparatively, 70.0% of Piper Jaffray Companies shares are owned by institutional investors. 13.9% of FBR & Co shares are owned by insiders. Comparatively, 5.4% of Piper Jaffray Companies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

FBR & Co pays an annual dividend of $0.80 per share and has a dividend yield of 4.6%. Piper Jaffray Companies pays an annual dividend of $1.25 per share and has a dividend yield of 2.0%. FBR & Co pays out -8.9% of its earnings in the form of a dividend. Piper Jaffray Companies pays out -143.7% 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.

Summary

Piper Jaffray Companies beats FBR & Co on 7 of the 12 factors compared between the two stocks.

FBR & Co Company Profile

FBR & Co. is an investment banking and institutional brokerage company. The Company focuses on the equity capital markets. The Company operates through two segments: capital markets, which includes investment banking, institutional brokerage and research, and principal investing. Through its broker-dealer operating subsidiaries, the Company focuses its business on providing: capital raising services, including underwriting and placement of public and private equity, equity-linked and debt securities; financial advisory services, including merger and acquisition (M&A) advisory, restructuring, liability management, recapitalization and strategic alternative analysis; institutional sales and trading services focused on equities, equity-linked securities, listed options, high-yield bonds, senior debt and bank loans, as well as securities lending activities, and differentiated securities research.

Piper Jaffray Companies Company Profile

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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