Reviewing Jefferies Financial Group (NYSE:JEF) and Franklin Resources (NYSE:BEN)

Franklin Resources (NYSE:BEN) and Jefferies Financial Group (NYSE:JEF) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Valuation & Earnings

This table compares Franklin Resources and Jefferies Financial Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Resources	$8.77 billion	1.88	$524.90 million	$1.47	22.10
Jefferies Financial Group	$10.82 billion	0.81	$710.47 million	$3.65	12.38

Jefferies Financial Group has higher revenue and earnings than Franklin Resources. Jefferies Financial Group is trading at a lower price-to-earnings ratio than Franklin Resources, indicating that it is currently the more affordable of the two stocks.

Dividends

Franklin Resources pays an annual dividend of $1.32 per share and has a dividend yield of 4.1%. Jefferies Financial Group pays an annual dividend of $1.60 per share and has a dividend yield of 3.5%. Franklin Resources pays out 89.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Jefferies Financial Group pays out 43.8% of its earnings in the form of a dividend. Franklin Resources has increased its dividend for 45 consecutive years and Jefferies Financial Group has increased its dividend for 2 consecutive years. Franklin Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Franklin Resources has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, Jefferies Financial Group has a beta of 1.57, suggesting that its stock price is 57% more volatile than the S&P 500.

Institutional and Insider Ownership

47.6% of Franklin Resources shares are owned by institutional investors. Comparatively, 60.9% of Jefferies Financial Group shares are owned by institutional investors. 23.4% of Franklin Resources shares are owned by company insiders. Comparatively, 19.9% of Jefferies Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Franklin Resources and Jefferies Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Resources	8.72%	11.55%	4.46%
Jefferies Financial Group	7.50%	9.26%	1.29%

Analyst Recommendations

This is a breakdown of recent ratings for Franklin Resources and Jefferies Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Resources	1	6	4	0	2.27
Jefferies Financial Group	0	5	2	0	2.29

Franklin Resources currently has a consensus target price of $34.33, indicating a potential upside of 5.68%. Jefferies Financial Group has a consensus target price of $56.86, indicating a potential upside of 25.79%. Given Jefferies Financial Group’s stronger consensus rating and higher probable upside, analysts plainly believe Jefferies Financial Group is more favorable than Franklin Resources.

Summary

Franklin Resources beats Jefferies Financial Group on 9 of the 17 factors compared between the two stocks.

About Franklin Resources

Franklin Resources, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides its services to individuals, institutions, pension plans, trusts, and partnerships. It launches equity, fixed income, balanced, and multi-asset mutual funds through its subsidiaries. The firm invests in the public equity, fixed income, and alternative markets. Franklin Resources, Inc. was founded in 1947 and is based in San Mateo, California with an additional office in Calgary, Canada; Dubai, United Arab Emirates; Edinburgh, United Kingdom; Fort Lauderdale, United States; Hyderabad, India; London, United Kingdom; Rancho Cordova, United states; Shanghai, China; Singapore; Stamford, United States; and Vienna, Austria.

About Jefferies Financial Group

Jefferies Financial Group Inc. operates as an investment banking and capital markets firm in the Americas, Europe, the Middle East, and the Asia-Pacific. The company operates in two segments, Investment Banking and Capital Markets, and Asset Management. It provides investment banking, advisory services with respect to mergers or acquisitions, debt financing, restructurings or recapitalizations, and private capital advisory transactions; underwriting and placement services related to corporate debt, municipal bonds, mortgage-backed and asset-backed securities, equity and equity-linked securities, and loan syndication services; and corporate lending services. The company also offers financing, securities lending, and other prime brokerage services; equities research, sales, and trading services; wealth management services; and online foreign exchange trading services. In addition, it provides investment grade distressed debt securities, U.S. and European government and agency securities, municipal bonds, leveraged loans, emerging markets debt, and interest rate and credit index derivative products; and manages and offers services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1962 and is headquartered in New York, New York.