Stifel Financial (NYSE:SF) & LPL Financial (NASDAQ:LPLA) Head to Head Survey

LPL Financial (NASDAQ:LPLA) and Stifel Financial (NYSE:SF) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares LPL Financial and Stifel Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LPL Financial	4.93%	31.26%	9.08%
Stifel Financial	16.11%	19.32%	2.40%

Valuation & Earnings

This table compares LPL Financial and Stifel Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LPL Financial	$16.99 billion	1.55	$863.02 million	$11.20	29.33
Stifel Financial	$5.84 billion	2.12	$683.78 million	$5.59	14.44

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

Dividends

LPL Financial pays an annual dividend of $1.20 per share and has a dividend yield of 0.4%. Stifel Financial pays an annual dividend of $1.36 per share and has a dividend yield of 1.7%. LPL Financial pays out 10.7% of its earnings in the form of a dividend. Stifel Financial pays out 24.3% 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. Stifel Financial has raised its dividend for 9 consecutive years. Stifel Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

LPL Financial has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Stifel Financial has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Insider and Institutional Ownership

95.7% of LPL Financial shares are held by institutional investors. Comparatively, 82.0% of Stifel Financial shares are held by institutional investors. 0.6% of LPL Financial shares are held by company insiders. Comparatively, 3.4% of Stifel Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for LPL Financial and Stifel Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LPL Financial	0	4	10	1	2.80
Stifel Financial	0	4	5	0	2.56

LPL Financial presently has a consensus target price of $397.92, indicating a potential upside of 21.11%. Stifel Financial has a consensus target price of $91.67, indicating a potential upside of 13.59%. Given LPL Financial’s stronger consensus rating and higher probable upside, equities research analysts plainly believe LPL Financial is more favorable than Stifel Financial.

Summary

LPL Financial beats Stifel Financial on 12 of the 18 factors compared between the two stocks.

About LPL Financial

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at enterprises in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, fixed income, alternative investments, retirement and 529 education savings plans, and insurance. The company also provides fee-based platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market products; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.

About Stifel Financial

Stifel Financial Corp., a financial services and bank holding company, provides retail and institutional wealth management, and investment banking services to individual investors, corporations, municipalities, and institutions in the United States and internationally. It operates in three segments: Global Wealth Management, Institutional Group, and Other. The company provides private client services, including securities transaction and financial planning services; institutional equity and fixed income sales, trading and research, and municipal finance services; investment banking services, such as mergers and acquisitions, public offerings, and private placements; and retail and commercial banking services comprising personal and commercial lending programs, as well as deposit accounts. It participates in and manages underwritings for corporate and public finance; and offers financial advisory and securities brokerage services. The company was founded in 1890 and is headquartered in Saint Louis, Missouri.