Piper Sandler Companies (NYSE:PIPR) versus JPMorgan Chase & Co. (NYSE:JPM) Critical Analysis

Piper Sandler Companies (NYSE:PIPR) and JPMorgan Chase & Co. (NYSE:JPM) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Insider & Institutional Ownership

72.8% of Piper Sandler Companies shares are held by institutional investors. Comparatively, 71.6% of JPMorgan Chase & Co. shares are held by institutional investors. 2.7% of Piper Sandler Companies shares are held by company insiders. Comparatively, 0.5% of JPMorgan Chase & Co. 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.

Profitability

This table compares Piper Sandler Companies and JPMorgan Chase & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Piper Sandler Companies	13.73%	19.91%	13.64%
JPMorgan Chase & Co.	20.90%	17.18%	1.31%

Risk & Volatility

Piper Sandler Companies has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500. Comparatively, JPMorgan Chase & Co. has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Piper Sandler Companies and JPMorgan Chase & Co., as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Piper Sandler Companies	0	3	2	0	2.40
JPMorgan Chase & Co.	2	12	14	0	2.43

Piper Sandler Companies presently has a consensus price target of $392.00, indicating a potential upside of 8.32%. JPMorgan Chase & Co. has a consensus price target of $333.90, indicating a potential upside of 1.39%. Given Piper Sandler Companies’ higher probable upside, research analysts clearly believe Piper Sandler Companies is more favorable than JPMorgan Chase & Co..

Dividends

Piper Sandler Companies pays an annual dividend of $2.80 per share and has a dividend yield of 0.8%. JPMorgan Chase & Co. pays an annual dividend of $6.00 per share and has a dividend yield of 1.8%. Piper Sandler Companies pays out 21.1% of its earnings in the form of a dividend. JPMorgan Chase & Co. pays out 29.7% 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. Piper Sandler Companies has raised its dividend for 1 consecutive years and JPMorgan Chase & Co. has raised its dividend for 15 consecutive years. JPMorgan Chase & Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Piper Sandler Companies and JPMorgan Chase & Co.”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Piper Sandler Companies	$1.53 billion	4.20	$181.11 million	$13.27	27.27
JPMorgan Chase & Co.	$278.91 billion	3.21	$58.47 billion	$20.19	16.31

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

Summary

Piper Sandler Companies beats JPMorgan Chase & Co. on 9 of the 17 factors compared between the two stocks.

About Piper Sandler Companies

Piper Sandler Companies operates as an investment bank and institutional securities firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. It offers investment banking services and institutional sales, trading, and research services for various equity and fixed income products; advisory services, such as mergers and acquisitions, equity and debt private placements, and debt and restructuring advisory; raises capital through equity and debt financings; underwrites municipal issuances; and municipal financial advisory and loan placement services, as well as various over-the-counter derivative products. It also provides public finance investment banking services that focus on state and local governments, and cultural and social service non-profit entities, as well as the education, healthcare, hospitality, senior living, housing, and transportation sectors. In addition, the company offers equity and fixed income advisory and trade execution services for institutional investors, corporations, and government and non-profit entities. Further, it is involved in the alternative asset management funds merchant banking and healthcare to invest firm capital and to manage capital from outside investors. The company was formerly known as Piper Jaffray Companies and changed its name to Piper Sandler Companies in January 2020. Piper Sandler Companies was founded in 1895 and is headquartered in Minneapolis, Minnesota.

About JPMorgan Chase & Co.

JPMorgan Chase & Co. is a financial holding company, which engages in the provision of financial and investment banking services. It focuses on investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. It operates through the following segments: Consumer and Community Banking (CCB), Commercial and Investment Bank (CIB), Asset and Wealth Management (AWM), and Corporate. The CCB segment originates and services mortgage loans. The CIB segment makes markets and services clients across fixed income, foreign exchange, equities, and commodities. The AWM segment provides initial capital investments in products such as mutual funds and capital invested alongside third-party investors. The Corporate segment manages its liquidity, funding, capital, structural interest rate, and foreign exchange risks. The company was founded in 1799 and is headquartered in New York, NY.