Financial Survey: Sprott (NYSE:SII) vs. Lazard (NYSE:LAZ)

Sprott (NYSE:SII) and Lazard (NYSE:LAZ) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Volatility and Risk

Sprott has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Lazard has a beta of 1.47, meaning that its stock price is 47% more 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%. Lazard pays an annual dividend of $2.00 per share and has a dividend yield of 5.5%. Sprott pays out 39.2% of its earnings in the form of a dividend. Lazard pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sprott has increased its dividend for 1 consecutive years.

Insider and Institutional Ownership

28.3% of Sprott shares are owned by institutional investors. Comparatively, 54.8% of Lazard shares are owned by institutional investors. 18.3% of Sprott shares are owned by company insiders. Comparatively, 0.9% of Lazard shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Sprott and Lazard’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprott	26.36%	28.40%	20.95%
Lazard	6.95%	23.58%	4.63%

Earnings & Valuation

This table compares Sprott and Lazard”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprott	$285.08 million	10.46	$67.35 million	$4.08	28.43
Lazard	$3.10 billion	1.29	$236.83 million	$2.04	17.67

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Sprott and Lazard, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprott	0	1	2	0	2.67
Lazard	2	4	4	0	2.20

Sprott presently has a consensus target price of $230.00, suggesting a potential upside of 98.32%. Lazard has a consensus target price of $49.00, suggesting a potential upside of 35.90%. Given Sprott’s stronger consensus rating and higher probable upside, research analysts plainly believe Sprott is more favorable than Lazard.

Summary

Sprott beats Lazard on 11 of the 17 factors compared between the two stocks.

About Sprott

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.

About Lazard

Lazard, Inc., together with its subsidiaries, operates as a financial advisory and asset management firm in North and South America, Europe, the Middle East, Asia, and Australia. It operates in two segments, Financial Advisory and Asset Management. The Financial Advisory segment offers financial advisory services, such as mergers and acquisitions, capital markets, shareholder, sovereign, geopolitical advisory, and other strategic advisory services, as well as restructuring and liability management, and capital raising and placement services. This segment offers its services to corporate, partnership, institutional, government, sovereign, and individual clients to various industry areas, including consumers, financial institutions, healthcare and life sciences, industrials, power and energy/infrastructure, real estate, technology, telecommunication, and media and entertainment. The Asset Management segment offers a range of investment solutions; investment and wealth management services in equity and fixed income strategies; asset allocation strategies; and alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries, and private clients. Lazard, Inc. was incorporated in 1848 and is headquartered in New York, New York.