Merriman (OTCMKTS:MERR) and JMP Group (NYSE:JMP) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Dividends

JMP Group pays an annual dividend of $0.36 per share and has a dividend yield of 8.1%. Merriman does not pay a dividend. JMP Group pays out 180.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Merriman has a beta of 2.15, indicating that its share price is 115% more volatile than the S&P 500. Comparatively, JMP Group has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Merriman N/A N/A N/A
JMP Group -2.51% 6.74% 0.59%

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Merriman N/A N/A N/A N/A N/A
JMP Group $109.87 million 0.86 -$15.88 million $0.20 22.15

Merriman has higher earnings, but lower revenue than JMP Group.

Institutional and Insider Ownership

14.3% of JMP Group shares are owned by institutional investors. 63.0% of Merriman shares are owned by insiders. Comparatively, 52.8% of JMP Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Merriman and JMP Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merriman 0 0 0 0 N/A
JMP Group 0 1 1 0 2.50

JMP Group has a consensus price target of $6.75, indicating a potential upside of 52.37%. Given JMP Group’s higher possible upside, analysts plainly believe JMP Group is more favorable than Merriman.

Summary

JMP Group beats Merriman on 7 of the 11 factors compared between the two stocks.

Merriman Company Profile

Merriman Holdings, Inc., through its subsidiary, Merriman Capital, Inc., provides capital market advisory and research, corporate, and investment banking services primarily in the United States and Canada. The company's investment banking services include corporate financing services, such as initial public offerings, secondary offerings, and private placements services; and strategic advisory services comprise transaction-specific advice regarding mergers and acquisitions, divestitures, spin-offs, and privatizations, as well as general strategic advice. It also offers institutional brokerage services, including institutional sales trading and equity execution, and options execution services to institutional clients. In addition, the company executes securities transactions for money managers, mutual funds, hedge funds, insurance companies, and pension and profit-sharing plans; and provides integrated research and trading solutions, as well as capital markets advisory services. It primarily serves institutional investors and corporate clients. The company was formerly known as Merriman Curhan Ford Group, Inc. and changed its name to Merriman Holdings, Inc. in August 2010. Merriman Holdings, Inc. was founded in 1987 and is headquartered in San Francisco, California.

JMP Group Company Profile

JMP Group LLC, together with its subsidiaries, provides investment banking, sales and trading, equity research, and asset management products and services in the United States. The company operates through three segments: Broker-Dealer, Asset Management, and Corporate. The Broker-Dealer segment offers various 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. This segment also provides institutional brokerage services and equity research services. The Asset Management segment is involved in the management of a range of pooled investment vehicles, including the hedge funds, hedge funds of funds, and collateralized loan obligations. The Corporate segment includes investments in public and private securities, and investment funds, as well as other investing activities. The company also provides investment advisory services to business development companies. In addition, it serves corporates, institutional clients and investors, and high net-worth individuals. JMP Group LLC is headquartered in San Francisco, California.

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