Nomura Holdings (NYSE: NMR) and E*TRADE Financial Corporation (NASDAQ:ETFC) are both large-cap financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitabiliy, earnings, institutional ownership and dividends.

Volatility and Risk

Nomura Holdings has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, E*TRADE Financial Corporation has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Valuation & Earnings

This table compares Nomura Holdings and E*TRADE Financial Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nomura Holdings $12.68 billion 1.78 $2.41 billion $0.63 9.40
E*TRADE Financial Corporation $2.32 billion 4.89 $592.13 million $2.15 19.18

Nomura Holdings has higher revenue and earnings than E*TRADE Financial Corporation. Nomura Holdings is trading at a lower price-to-earnings ratio than E*TRADE Financial Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Nomura Holdings pays an annual dividend of $0.07 per share and has a dividend yield of 1.2%. E*TRADE Financial Corporation does not pay a dividend. Nomura Holdings pays out 11.1% of its earnings in the form of a dividend.

Institutional and Insider Ownership

0.6% of Nomura Holdings shares are owned by institutional investors. Comparatively, 93.2% of E*TRADE Financial Corporation shares are owned by institutional investors. 0.2% of E*TRADE Financial Corporation 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 Nomura Holdings and E*TRADE Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nomura Holdings 15.93% 10.36% 0.66%
E*TRADE Financial Corporation 28.42% 9.06% 1.03%

Analyst Recommendations

This is a summary of current ratings and price targets for Nomura Holdings and E*TRADE Financial Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nomura Holdings 0 3 1 0 2.25
E*TRADE Financial Corporation 0 5 12 0 2.71

E*TRADE Financial Corporation has a consensus price target of $41.33, indicating a potential upside of 0.25%. Given E*TRADE Financial Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe E*TRADE Financial Corporation is more favorable than Nomura Holdings.

Summary

E*TRADE Financial Corporation beats Nomura Holdings on 11 of the 16 factors compared between the two stocks.

Nomura Holdings Company Profile

Nomura Holdings, Inc. (Nomura) is a financial services company. The Company, through its broker-dealer, banking and other financial services subsidiaries, provide investment, financing and related services to individual, institutional and government clients across the world. The Company’s segments include Retail, Asset Management and Wholesale. Its clients include individuals, corporations, financial institutions, governments and governmental agencies. The Company’s Retail segment provides investment consultation services to individual clients in Japan. The Company’s Asset Management segment develops and manages investment trusts, and provides investment advisory services. The Company’s Wholesale segment is engaged in the sales and trading of debt and equity securities, derivatives, and currencies on a global basis, and provides investment banking services, such as the underwriting of debt and equity securities, as well as mergers and acquisitions and financial advice.

E*TRADE Financial Corporation Company Profile

E*Trade Financial Corporation is a financial services company. The Company provides online brokerage and related products and services primarily to individual retail investors under the brand E*TRADE Financial. The Company also provides investor-focused banking products, primarily sweep deposits, to retail investors. It provides its services to customers through its digital platforms and network of industry-licensed customer service representatives and Financial Consultants, over the phone and by e-mail. The Company’s brokerage business is organized into three product areas: Trading, Investing, and Corporate Services. The Company’s Trading products deliver automated trade order placement and execution services. The Company’s Investing products help investors build wealth and address their long-term investing needs. The Company’s Corporate Services channel provides stock plan administration services for both public and private companies.

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