Head to Head Contrast: BGC Partners (BGCP) & Stifel Financial Corporation (SF)

Stifel Financial Corporation (NYSE: SF) and BGC Partners (NASDAQ:BGCP) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitabiliy, institutional ownership, valuation, earnings and analyst recommendations.

Dividends

BGC Partners pays an annual dividend of $0.72 per share and has a dividend yield of 5.8%. Stifel Financial Corporation does not pay a dividend. BGC Partners pays out 184.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

86.8% of Stifel Financial Corporation shares are owned by institutional investors. Comparatively, 46.1% of BGC Partners shares are owned by institutional investors. 5.1% of Stifel Financial Corporation shares are owned by insiders. Comparatively, 37.4% of BGC Partners shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Stifel Financial Corporation and BGC Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stifel Financial Corporation 0 6 0 0 2.00
BGC Partners 0 0 0 0 N/A

Stifel Financial Corporation currently has a consensus target price of $51.00, indicating a potential upside of 12.26%. Given Stifel Financial Corporation’s higher possible upside, analysts clearly believe Stifel Financial Corporation is more favorable than BGC Partners.

Profitability

This table compares Stifel Financial Corporation and BGC Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stifel Financial Corporation 4.56% 7.77% 1.12%
BGC Partners 3.12% 8.66% 2.11%

Valuation and Earnings

This table compares Stifel Financial Corporation and BGC Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stifel Financial Corporation $2.63 billion 1.18 $97.88 million $1.43 31.77
BGC Partners $2.62 billion 1.34 $111.12 million $0.39 31.67

BGC Partners has higher revenue, but lower earnings than Stifel Financial Corporation. BGC Partners is trading at a lower price-to-earnings ratio than Stifel Financial Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Stifel Financial Corporation has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500. Comparatively, BGC Partners has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Summary

Stifel Financial Corporation beats BGC Partners on 8 of the 14 factors compared between the two stocks.

Stifel Financial Corporation Company Profile

Stifel Financial Corp. is a financial holding company. Its principal subsidiary is Stifel, Nicolaus & Company, Incorporated, a retail and institutional wealth management and investment banking firm. It operates through three segments: Global Wealth Management, Institutional Group and Other. The Global Wealth Management segment consists of the Private Client Group and Stifel Bank businesses. The Institutional Group segment includes research, equity and fixed income institutional sales and trading, investment banking, public finance and syndicate. The Other segment includes interest income from stock borrow activities and interest income. Its principal activities are private client services, including securities transaction and financial planning services; institutional equity and fixed income sales, trading, research and municipal finance; investment banking services, and retail and commercial banking, including personal and commercial lending programs.

BGC Partners Company Profile

BGC Partners, Inc. (BGC) is a global brokerage company servicing the financial and real estate markets. The Company operates through two segments: Financial Services and Real Estate Services. It provides a range of services, including trade execution, broker-dealer services clearing, trade compression, post trade, information, and other back-office services to a range of financial and non-financial institutions. Its integrated platform is designed to provide flexibility to customers with regard to price discovery, execution and processing of transactions, and enables them to use voice, hybrid, or in various markets, electronic brokerage services in connection with transactions executed either over-the-counter or through an exchange. Through the Company’s FENICS, Lucera, BGC Trader, BGC Market Data and Capitalab brands, it offers electronic brokerage, financial technology solutions, market data, post-trade services, and analytics related to select financial instruments and markets.

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