Cowen Group (NASDAQ: COWN) and Raymond James Financial (NYSE:RJF) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Valuation and Earnings
This table compares Cowen Group and Raymond James Financial’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Cowen Group | $444.43 million | 1.09 | -$2.78 million | ($0.09) | -173.87 |
| Raymond James Financial | $6.12 billion | 1.83 | $605.03 million | $4.21 | 18.47 |
Raymond James Financial has higher revenue and earnings than Cowen Group. Cowen Group is trading at a lower price-to-earnings ratio than Raymond James Financial, indicating that it is currently the more affordable of the two stocks.
Dividends
Raymond James Financial pays an annual dividend of $0.88 per share and has a dividend yield of 1.1%. Cowen Group does not pay a dividend. Raymond James Financial pays out 20.9% of its earnings in the form of a dividend. Cowen Group has raised its dividend for 4 consecutive years.
Profitability
This table compares Cowen Group and Raymond James Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cowen Group | 1.00% | 1.92% | 0.72% |
| Raymond James Financial | 9.78% | 13.37% | 2.19% |
Institutional and Insider Ownership
81.3% of Cowen Group shares are held by institutional investors. Comparatively, 70.1% of Raymond James Financial shares are held by institutional investors. 4.9% of Cowen Group shares are held by insiders. Comparatively, 11.2% of Raymond James Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Cowen Group and Raymond James Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cowen Group | 0 | 3 | 0 | 0 | 2.00 |
| Raymond James Financial | 0 | 3 | 3 | 0 | 2.50 |
Cowen Group presently has a consensus target price of $17.67, indicating a potential upside of 12.89%. Raymond James Financial has a consensus target price of $88.80, indicating a potential upside of 14.21%. Given Raymond James Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Raymond James Financial is more favorable than Cowen Group.
Volatility & Risk
Cowen Group has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500. Comparatively, Raymond James Financial has a beta of 1.65, indicating that its stock price is 65% more volatile than the S&P 500.
Summary
Raymond James Financial beats Cowen Group on 12 of the 16 factors compared between the two stocks.
Cowen Group Company Profile
Cowen Inc., formerly Cowen Group, Inc., is a financial services company. The Company provides alternative investment management, investment banking, research, sales and trading, and prime brokerage services. It operates through two segments: alternative investment and broker-dealer. The alternative investment segment includes private equity structures, registered investment companies and listed investment vehicles. The broker-dealer segment offers industry focused investment banking for growth-oriented companies, including advisory and global capital markets origination and domain knowledge-driven research, and a sales and trading platform for institutional investors. Its alternative investment platform, which operates under the Ramius name, offers investment products and solutions across the liquidity spectrum to institutional and private clients. Ramius offers investors access to strategies to meet their specific needs, including long/short equity and event driven equity.
Raymond James Financial Company Profile
Raymond James Financial, Inc. (RJF) is a financial holding company. The Company’s subsidiaries include Raymond James & Associates, Inc. (RJ&A), Raymond James Financial Services, Inc. (RJFS), Raymond James Financial Services Advisors, Inc. (RJFSA), Raymond James Ltd. (RJ Ltd.), Eagle Asset Management, Inc. (Eagle), and Raymond James Bank, N.A. (RJ Bank). It operates through five segments: Private Client Group (PCG), Capital Markets, Asset Management, RJ Bank and the Other segment. The Private Client Group segment includes the retail branches of the Company’s broker-dealer subsidiaries located throughout the United States, Canada and the United Kingdom. The Capital Markets segment includes institutional sales and trading in the United States, Canada and Europe. The Asset Management segment includes the operations of Eagle, the Eagle Family of Funds and other fee-based asset management programs. RJ Bank segment provides corporate loan, securities based loans (SB) and residential loans.
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