Diamond Hill Investment Group (NASDAQ:DHIL) and Raymond James Financial (NYSE:RJF) Financial Survey

Diamond Hill Investment Group (NASDAQ:DHIL) and Raymond James Financial (NYSE:RJF) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, valuation, institutional ownership, profitability, earnings and dividends.

Dividends

Diamond Hill Investment Group pays an annual dividend of $6.00 per share and has a dividend yield of 3.5%. Raymond James Financial pays an annual dividend of $2.00 per share and has a dividend yield of 1.2%. Diamond Hill Investment Group pays out 34.8% of its earnings in the form of a dividend. Raymond James Financial pays out 19.4% 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. Raymond James Financial has increased its dividend for 3 consecutive years.

Risk & Volatility

Diamond Hill Investment Group has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, Raymond James Financial has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Earnings & Valuation

This table compares Diamond Hill Investment Group and Raymond James Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diamond Hill Investment Group	$151.10 million	3.04	$43.18 million	$17.22	9.86
Raymond James Financial	$15.91 billion	2.05	$2.14 billion	$10.29	16.11

Raymond James Financial has higher revenue and earnings than Diamond Hill Investment Group. Diamond Hill Investment Group is trading at a lower price-to-earnings ratio than Raymond James Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Diamond Hill Investment Group and Raymond James Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diamond Hill Investment Group	0	1	0	0	2.00
Raymond James Financial	0	10	3	0	2.23

Raymond James Financial has a consensus target price of $180.73, indicating a potential upside of 9.00%. Given Raymond James Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Raymond James Financial is more favorable than Diamond Hill Investment Group.

Profitability

This table compares Diamond Hill Investment Group and Raymond James Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diamond Hill Investment Group	31.32%	20.71%	14.34%
Raymond James Financial	13.42%	18.19%	2.61%

Institutional & Insider Ownership

65.5% of Diamond Hill Investment Group shares are held by institutional investors. Comparatively, 83.8% of Raymond James Financial shares are held by institutional investors. 4.6% of Diamond Hill Investment Group shares are held by company insiders. Comparatively, 0.5% of Raymond James Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Raymond James Financial beats Diamond Hill Investment Group on 10 of the 17 factors compared between the two stocks.

About Diamond Hill Investment Group

Diamond Hill Investment Group, Inc., through its subsidiary, Diamond Hill Capital Management, Inc., provides investment advisory and fund administration services in the United States. It offers investment advisory and related services to clients through pooled vehicles, such as private fund; separately managed accounts; collective investment trusts; and other pooled vehicles, including sub-advised funds and model delivery programs. The company also provides fund administration services comprising portfolio and regulatory compliance, treasury and financial oversight, and general business management and governance of the funds, as well as oversight of back-office service providers, which include the custodian, fund accountant, and transfer agent. Diamond Hill Investment Group, Inc. was incorporated in 1990 and is based in Columbus, Ohio.

About Raymond James Financial

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment provides corporate loans, SBL, tax-exempt loans, and residential loans. The Other segment engages in private equity activities, including various direct and third party private equity investments; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is based in St. Petersburg, Florida.