Head-To-Head Contrast: SWK (NASDAQ:SWKH) versus Jefferies Financial Group (NYSE:JEF)

Jefferies Financial Group (NYSE:JEF) and SWK (NASDAQ:SWKH) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Jefferies Financial Group and SWK, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jefferies Financial Group	0	3	4	0	2.57
SWK	0	2	0	0	2.00

Jefferies Financial Group presently has a consensus target price of $72.71, suggesting a potential upside of 35.55%. SWK has a consensus target price of $18.00, suggesting a potential upside of 5.88%. Given Jefferies Financial Group’s stronger consensus rating and higher possible upside, equities analysts plainly believe Jefferies Financial Group is more favorable than SWK.

Profitability

This table compares Jefferies Financial Group and SWK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jefferies Financial Group	6.56%	7.27%	1.07%
SWK	50.37%	9.81%	8.57%

Insider & Institutional Ownership

60.9% of Jefferies Financial Group shares are owned by institutional investors. Comparatively, 99.3% of SWK shares are owned by institutional investors. 19.8% of Jefferies Financial Group shares are owned by insiders. Comparatively, 1.3% of SWK shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Jefferies Financial Group and SWK”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jefferies Financial Group	$10.82 billion	1.02	$710.47 million	$2.83	18.96
SWK	$44.99 million	4.57	$13.49 million	$1.86	9.14

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

Risk and Volatility

Jefferies Financial Group has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, SWK has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500.

Summary

Jefferies Financial Group beats SWK on 9 of the 14 factors compared between the two stocks.

About Jefferies Financial Group

Jefferies Financial Group Inc. operates as an investment banking and capital markets firm in the Americas, Europe, the Middle East, and the Asia-Pacific. The company operates in two segments, Investment Banking and Capital Markets, and Asset Management. It provides investment banking, advisory services with respect to mergers or acquisitions, debt financing, restructurings or recapitalizations, and private capital advisory transactions; underwriting and placement services related to corporate debt, municipal bonds, mortgage-backed and asset-backed securities, equity and equity-linked securities, and loan syndication services; and corporate lending services. The company also offers financing, securities lending, and other prime brokerage services; equities research, sales, and trading services; wealth management services; and online foreign exchange trading services. In addition, it provides investment grade distressed debt securities, U.S. and European government and agency securities, municipal bonds, leveraged loans, emerging markets debt, and interest rate and credit index derivative products; and manages and offers services to a diverse group of alternative asset management platforms across a spectrum of investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1962 and is headquartered in New York, New York.

About SWK

SWK Holdings Corporation, offers specialty finance and asset management services in the United States. It operates in two segments, Finance Receivables and Pharmaceutical Development. The Finance Receivables segment provides customized financing solutions to a range of life science companies, including companies in the biotechnology, medical device, medical diagnostics and related tools, animal health, and pharmaceutical industries, as well as institutions and inventors. This segment also offers non-discretionary investment advisory services to institutional clients in separately managed accounts to invest in life science finance. The Pharmaceutical Development segment provides customers pharmaceutical development, formulation, and manufacturing services, as well as formulation solutions built around its proprietary oral drug delivery technologies, the Peptelligence platform. It also offers intellectual property licensing business. The company was formerly known as Kana Software, Inc. and changed its name to SWK Holdings Corporation in December 2009. SWK Holdings Corporation was incorporated in 1996 and is headquartered in Dallas, Texas.