Moelis & (NYSE: MC) and JMP Group (NYSE:JMP) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitabiliy, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Moelis & and JMP Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Moelis & 0 3 4 0 2.57
JMP Group 0 0 0 0 N/A

Moelis & currently has a consensus price target of $37.57, suggesting a potential downside of 5.12%. Given Moelis &’s higher possible upside, research analysts plainly believe Moelis & is more favorable than JMP Group.

Valuation & Earnings

This table compares Moelis & and JMP Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Moelis & $700.69 million 1.56 $55.04 million $2.00 19.80
JMP Group $119.46 million 0.97 -$11.70 million ($0.54) -9.91

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

Profitability

This table compares Moelis & and JMP Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Moelis & 8.50% 52.98% 24.68%
JMP Group -10.35% 1.47% 0.19%

Institutional and Insider Ownership

90.9% of Moelis & shares are owned by institutional investors. Comparatively, 13.6% of JMP Group shares are owned by institutional investors. 64.5% of Moelis & shares are owned by company insiders. Comparatively, 52.1% of JMP Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Moelis & pays an annual dividend of $1.48 per share and has a dividend yield of 3.7%. JMP Group pays an annual dividend of $0.36 per share and has a dividend yield of 6.7%. Moelis & pays out 74.0% of its earnings in the form of a dividend. JMP Group pays out -66.7% 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. Moelis & has increased its dividend for 2 consecutive years and JMP Group has increased its dividend for 7 consecutive years. JMP Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Moelis & has a beta of 1.87, meaning that its stock price is 87% more volatile than the S&P 500. Comparatively, JMP Group has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Summary

Moelis & beats JMP Group on 12 of the 15 factors compared between the two stocks.

Moelis & Company Profile

Moelis & Company is an investment banking advisory company. The Company provides strategic and financial advice to a client base, including corporations, governments and financial sponsors. The Company offers financial advisory services across various industry sectors. It advices its clients on decisions, including mergers and acquisitions (M&A), recapitalizations and restructurings, and other corporate finance matters. With 17 offices located in North and South America, Europe, the Middle East, Asia and Australia, the Company provided information flow and cross-border solutions as of December 31, 2016. The Company offers advisory services in all industries, including consumer, retail and restaurants; energy, power and infrastructure; financial institutions; financial sponsors; general industrials; healthcare; real estate, gaming, lodging and leisure, and technology, media and telecommunications. It advises clients on all aspects of public and private debt and equity transactions.

JMP Group Company Profile

JMP Group, Inc. is a full-service investment banking and asset management firm. The Company operates in five segments: Broker-Dealer, Asset Management, Corporate Credit, Investment Income and Corporate Costs. The Broker-Dealer segment includes a range of services, such as underwriting and acting as a placement agent for public and private capital markets raising transactions and financial advisory services in mergers and acquisitions, restructuring and other strategic transactions. The Asset Management segment includes the management of a range of pooled investment vehicles. The Corporate Credit segment includes the management of collateralized loan obligations and small business loans. The Investment Income segment includes income from the Company’s principal investments in public and private securities. The Corporate Costs segment includes expenses related to JMP Group Inc., the holding company, and JMP Group LLC, and comprises corporate overhead expenses and interest expense.

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