Nomura Holdings Inc ADR (NYSE: NMR) and LPL Financial Holdings (NASDAQ:LPLA) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.

Earnings and Valuation

This table compares Nomura Holdings Inc ADR and LPL Financial Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nomura Holdings Inc ADR $12.98 billion 1.45 $2.23 billion $0.63 8.43
LPL Financial Holdings $4.13 billion 0.99 $560.84 million $2.30 19.71

Nomura Holdings Inc ADR has higher revenue and earnings than LPL Financial Holdings. Nomura Holdings Inc ADR is trading at a lower price-to-earnings ratio than LPL Financial Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Nomura Holdings Inc ADR and LPL Financial Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nomura Holdings Inc ADR 0 2 1 0 2.33
LPL Financial Holdings 1 2 4 1 2.63

LPL Financial Holdings has a consensus target price of $49.25, suggesting a potential upside of 8.62%. Given LPL Financial Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe LPL Financial Holdings is more favorable than Nomura Holdings Inc ADR.

Dividends

Nomura Holdings Inc ADR pays an annual dividend of $0.07 per share and has a dividend yield of 1.3%. LPL Financial Holdings pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Nomura Holdings Inc ADR pays out 11.1% of its earnings in the form of a dividend. LPL Financial Holdings pays out 43.5% 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.

Volatility and Risk

Nomura Holdings Inc ADR has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500. Comparatively, LPL Financial Holdings has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500.

Profitability

This table compares Nomura Holdings Inc ADR and LPL Financial Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nomura Holdings Inc ADR 15.47% 8.69% 0.57%
LPL Financial Holdings 5.10% 26.45% 4.70%

Institutional and Insider Ownership

0.6% of Nomura Holdings Inc ADR shares are held by institutional investors. Comparatively, 89.7% of LPL Financial Holdings shares are held by institutional investors. 4.0% of LPL Financial Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

LPL Financial Holdings beats Nomura Holdings Inc ADR on 12 of the 17 factors compared between the two stocks.

About Nomura Holdings Inc ADR

Nomura Holdings, Inc. (Nomura) is a financial services company. The Company, through its broker-dealer, banking and other financial services subsidiaries, provide investment, financing and related services to individual, institutional and government clients across the world. The Company’s segments include Retail, Asset Management and Wholesale. Its clients include individuals, corporations, financial institutions, governments and governmental agencies. The Company’s Retail segment provides investment consultation services to individual clients in Japan. The Company’s Asset Management segment develops and manages investment trusts, and provides investment advisory services. The Company’s Wholesale segment is engaged in the sales and trading of debt and equity securities, derivatives, and currencies on a global basis, and provides investment banking services, such as the underwriting of debt and equity securities, as well as mergers and acquisitions and financial advice.

About LPL Financial Holdings

LPL Financial Holdings Inc. is a broker-dealer, a custodian for registered investment advisors and an independent consultant to retirement plans. The Company provides a platform of brokerage and investment advisory services to independent financial advisors, including financial advisors at financial institutions across the country. It also supported approximately 4,000 financial advisors, affiliated and licensed with insurance companies through customized clearing services, advisory platforms and technology solutions, as of December 31, 2016. Through its advisors, it is a distributor of financial products and services in the United States. It provides its technology and service to advisors through a technology platform that is server-based and Web-accessible. Its technology offerings are designed to permit its advisors to manage various aspects of their businesses. It automates time-consuming processes, such as account opening and management, document imaging and account rebalancing.

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