Financial Review: Sprott (SII) versus The Competition

Sprott (NYSE:SII) is one of 1,743 public companies in the “Capital Markets” industry, but how does it contrast to its competitors? We will compare Sprott to related businesses based on the strength of its analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Earnings and Valuation

This table compares Sprott and its competitors top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Sprott	$285.08 million	$67.35 million	25.84
Sprott Competitors	$2.23 billion	$398.65 million	16.95

Sprott’s competitors have higher revenue and earnings than Sprott. Sprott is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Sprott and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprott	27.87%	29.66%	21.78%
Sprott Competitors	318.28%	11.55%	3.69%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sprott and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprott	0	1	2	0	2.67
Sprott Competitors	5561	20139	22480	642	2.37

Sprott currently has a consensus price target of $230.00, indicating a potential upside of 100.91%. As a group, “Capital Markets” companies have a potential upside of 26.06%. Given Sprott’s stronger consensus rating and higher probable upside, research analysts clearly believe Sprott is more favorable than its competitors.

Institutional & Insider Ownership

28.3% of Sprott shares are owned by institutional investors. Comparatively, 30.5% of shares of all “Capital Markets” companies are owned by institutional investors. 18.3% of Sprott shares are owned by insiders. Comparatively, 12.9% of shares of all “Capital Markets” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Sprott has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, Sprott’s competitors have a beta of 0.79, meaning that their average share price is 21% less volatile than the S&P 500.

Dividends

Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.4%. Sprott pays out 36.1% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 29.2% of their earnings in the form of a dividend. Sprott has increased its dividend for 1 consecutive years. Sprott lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Summary

Sprott beats its competitors on 8 of the 15 factors compared.

Sprott Company Profile

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.