Piper Jaffray Companies (NYSE: PJC) and PJT Partners (NYSE:PJT) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and target prices for Piper Jaffray Companies and PJT Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Piper Jaffray Companies 2 2 0 0 1.50
PJT Partners 0 0 1 0 3.00

Piper Jaffray Companies presently has a consensus target price of $21.75, suggesting a potential downside of 60.70%. PJT Partners has a consensus target price of $45.00, suggesting a potential upside of 18.36%. Given PJT Partners’ stronger consensus rating and higher possible upside, analysts clearly believe PJT Partners is more favorable than Piper Jaffray Companies.

Volatility & Risk

Piper Jaffray Companies has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500. Comparatively, PJT Partners has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.

Earnings and Valuation

This table compares Piper Jaffray Companies and PJT Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Piper Jaffray Companies $821.58 million 1.02 -$1.51 million ($0.10) -553.44
PJT Partners $524.92 million 1.34 -$1.85 million ($0.10) -380.20

Piper Jaffray Companies has higher revenue and earnings than PJT Partners. Piper Jaffray Companies is trading at a lower price-to-earnings ratio than PJT Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

Piper Jaffray Companies pays an annual dividend of $1.25 per share and has a dividend yield of 2.3%. PJT Partners pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Piper Jaffray Companies pays out -1,249.9% of its earnings in the form of a dividend. PJT Partners pays out -200.0% 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. Piper Jaffray Companies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Piper Jaffray Companies and PJT Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Piper Jaffray Companies 0.40% 9.63% 3.81%
PJT Partners -0.27% -115.47% 11.68%

Insider and Institutional Ownership

66.4% of Piper Jaffray Companies shares are held by institutional investors. Comparatively, 59.2% of PJT Partners shares are held by institutional investors. 5.4% of Piper Jaffray Companies shares are held by insiders. Comparatively, 3.3% of PJT Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Piper Jaffray Companies beats PJT Partners on 9 of the 16 factors compared between the two stocks.

About Piper Jaffray Companies

Piper Jaffray Companies is an investment bank and asset management company. The Company’s segments include Capital Markets and Asset Management. The Capital Markets segment provides investment banking and institutional sales, trading and research services for various equity and fixed income products. The Asset Management segment includes its traditional asset management business and its investments in registered funds and private funds or partnerships that it manages. It provides a range of products and services, including equity and debt capital markets products; public finance services; financial advisory services; equity and fixed income institutional brokerage; equity and fixed income research, and asset management services. The Company serves the needs of corporations, private equity groups, public entities, non-profit entities and institutional investors in the United States and internationally.

About PJT Partners

PJT Partners Inc. is an advisory-focused investment bank. The Company offers an array of strategic advisory, restructuring and special situations and private fund advisory and placement services to corporations, financial sponsors, institutional investors and governments. It provides, through Park Hill Group, private fund advisory and placement services for alternative investment managers, including private equity funds, real estate funds and hedge funds. Its advisory business offers a range of financial advisory and transaction execution capability, including mergers and acquisitions, joint ventures, minority investments, asset swaps, divestitures, takeover defenses, corporate finance advisory, private placements and distressed sales. Its Restructuring and Special Situations Group’s services include advising companies, creditors and financial sponsors on recapitalizations, reorganizations, exchange offers, debt repurchases, capital raises, and distressed mergers and acquisitions.

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