Jefferies Financial Group (NYSE:JEF) and Wisdom Tree Investments (NASDAQ:WETF) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.
Risk & Volatility
Jefferies Financial Group has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Wisdom Tree Investments has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500.
Jefferies Financial Group pays an annual dividend of $0.50 per share and has a dividend yield of 2.3%. Wisdom Tree Investments pays an annual dividend of $0.12 per share and has a dividend yield of 1.9%. Jefferies Financial Group pays out 61.7% of its earnings in the form of a dividend. Wisdom Tree Investments pays out 37.5% 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.
This is a breakdown of current recommendations and price targets for Jefferies Financial Group and Wisdom Tree Investments, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Jefferies Financial Group||0||1||0||0||2.00|
|Wisdom Tree Investments||2||2||1||0||1.80|
Jefferies Financial Group presently has a consensus target price of $26.50, suggesting a potential upside of 23.83%. Wisdom Tree Investments has a consensus target price of $7.63, suggesting a potential upside of 21.61%. Given Jefferies Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe Jefferies Financial Group is more favorable than Wisdom Tree Investments.
Insider and Institutional Ownership
76.1% of Jefferies Financial Group shares are held by institutional investors. Comparatively, 73.9% of Wisdom Tree Investments shares are held by institutional investors. 10.0% of Jefferies Financial Group shares are held by insiders. Comparatively, 14.9% of Wisdom Tree Investments shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Jefferies Financial Group and Wisdom Tree Investments’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Jefferies Financial Group||N/A||N/A||N/A|
|Wisdom Tree Investments||12.84%||12.97%||4.99%|
Valuation & Earnings
This table compares Jefferies Financial Group and Wisdom Tree Investments’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Jefferies Financial Group||$5.01 billion||1.28||$1.03 billion||$0.81||26.42|
|Wisdom Tree Investments||$274.12 million||3.55||$36.63 million||$0.32||19.59|
Jefferies Financial Group has higher revenue and earnings than Wisdom Tree Investments. Wisdom Tree Investments is trading at a lower price-to-earnings ratio than Jefferies Financial Group, indicating that it is currently the more affordable of the two stocks.
Jefferies Financial Group Company Profile
Jefferies Financial Group Inc., a financial services company, engages in investment banking and capital markets, asset management, and direct investing businesses in the Americas, Europe, and Asia. the company also offers equities research, sales, and trading services; equity finance services comprising financing, securities lending, and other prime brokerage services; and wealth management services to high net worth individuals, their families and businesses, private equity and venture funds, and small institutions. In addition, it provides fixed income sales and trading services for investment grade corporate bonds, U.S. and European government and agency securities, municipal bonds, mortgage- and asset-backed securities, leveraged loans, consumer loans, securities, markets debt, interest rate, and credit derivative products, as well as foreign exchange trade execution and securitization capabilities, as well as manages, invests in, and provides services to a group of alternative asset management platforms in 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 1968 and is headquartered in New York, New York.
Wisdom Tree Investments Company Profile
WisdomTree Investments, Inc., through its subsidiaries, operates as an exchange-traded funds (ETFs) sponsor and asset manager. It offers ETFs in equities, currency, fixed income, and alternatives asset classes. The company also licenses its indexes to third parties for proprietary products, as well as offers a platform to promote the use of WisdomTree ETFs in 401(k) plans. It develops index using its fundamentally weighted index methodology. In addition, the company provides investment advisory services. The company was founded in 1985 and is based in New York, New York.
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