Analyzing StepStone Group (NASDAQ:STEP) and Lazard (NYSE:LAZ)

StepStone Group (NASDAQ:STEP) and Lazard (NYSE:LAZ) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares StepStone Group and Lazard’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
StepStone Group N/A N/A N/A
Lazard 11.62% 47.79% 6.01%

Earnings and Valuation

This table compares StepStone Group and Lazard’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
StepStone Group N/A N/A N/A N/A N/A
Lazard $2.67 billion 1.78 $286.50 million $3.28 13.77

Lazard has higher revenue and earnings than StepStone Group.

Analyst Recommendations

This is a breakdown of current ratings for StepStone Group and Lazard, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
StepStone Group 0 3 2 0 2.40
Lazard 1 5 3 0 2.22

StepStone Group presently has a consensus target price of $29.75, indicating a potential downside of 23.01%. Lazard has a consensus target price of $38.44, indicating a potential downside of 14.87%. Given Lazard’s higher probable upside, analysts clearly believe Lazard is more favorable than StepStone Group.

Institutional & Insider Ownership

69.3% of Lazard shares are held by institutional investors. 3.6% of Lazard shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Lazard beats StepStone Group on 8 of the 9 factors compared between the two stocks.

About StepStone Group

StepStone Group Inc. is an investment firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, and buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, consumer staples , financials, telecommunication services, energy, infrastructure, real estate, and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. It typically invests between $15 million and $200 million in firms with enterprise value between $150 million and $25000 million. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and International funds. It also seeks to make co-investments and follow on investments and considers partial interests in funds. StepStone Group LP was founded in 2007 and is based in New York, New York with additional offices across North America, Europe, Australia, and Asia.

About Lazard

Lazard Ltd, together with its subsidiaries, operates as a financial advisory and asset management firm in North America, Europe, Asia, Australia, and Central and South America. Its Financial Advisory segment offers various financial advisory services regarding mergers and acquisitions and other strategic matters, capital advisory, restructurings, shareholder advisory, sovereign advisory, capital raising, and other strategic advisory matters. This segment serves corporate, partnership, institutional, government, sovereign, and individual clients. The company's Asset Management segment offers a range of investment solutions and investment management services in equity and fixed income strategies; and alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries, and private clients. Lazard Ltd was founded in 1848 and is based in Hamilton, Bermuda.

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