Critical Contrast: The Charles Schwab Corporation (SCHW) versus Jefferies Group (JEF)

The Charles Schwab Corporation (NYSE: SCHW) and Jefferies Group (NYSE:JEF) are both investment banking & brokerage services – nec companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for The Charles Schwab Corporation and Jefferies Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Charles Schwab Corporation 0 6 9 0 2.60
Jefferies Group 0 0 0 0 N/A

The Charles Schwab Corporation presently has a consensus price target of $46.86, suggesting a potential upside of 5.20%.

Profitability

This table compares The Charles Schwab Corporation and Jefferies Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Charles Schwab Corporation 27.30% 15.77% 1.01%
Jefferies Group N/A N/A N/A

Institutional & Insider Ownership

79.4% of The Charles Schwab Corporation shares are owned by institutional investors. 12.0% of The Charles Schwab Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

The Charles Schwab Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Jefferies Group does not pay a dividend. The Charles Schwab Corporation pays out 20.5% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares The Charles Schwab Corporation and Jefferies Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
The Charles Schwab Corporation $7.48 billion 7.98 $1.89 billion $1.56 28.55
Jefferies Group N/A N/A N/A $1.09 N/A

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

Summary

The Charles Schwab Corporation beats Jefferies Group on 9 of the 10 factors compared between the two stocks.

About The Charles Schwab Corporation

The Charles Schwab Corporation (CSC) is a savings and loan holding company. The Company, through its subsidiaries, engages in wealth management, securities brokerage, banking, money management and financial advisory services. The Company provides financial services to individuals and institutional clients through two segments: Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services, retirement plan services and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services. The Company offers a range of products to address individuals’ varying investment and financial needs. Its product offerings include brokerage, mutual funds, ETFs, advice solutions, banking and trust. Brokerage provides a range of brokerage accounts with cash management capabilities. Mutual funds offer third-party mutual funds through the Mutual Fund Marketplace.

About Jefferies Group

Jefferies Group LLC and its subsidiaries operate as a securities and investment banking firm. The Company operates in two business segments: Capital Markets segment consists of the Company’s securities and commodities trading activities and its investment banking activities, and Asset Management segment includes asset management activities and related services. On July 1, 2011, the Company acquired the Bache Global Commodities Group from Prudential Financial, Inc., and as of November 30, 2011, the Company operated a futures commission merchant through Jefferies Bache, LLC in the United States and a global commodities and financial derivatives broker through Jefferies Bache Limited in the United Kingdom. Effective March 1, 2013, Leucadia National Corp (Leucadia) acquired the remaining 71.4% interest in Jefferies Group Inc . Effective March 1, 2013, Leucadia National Corp (Leucadia) acquired the remaining 71.4% interest in Jefferies Group Inc.

Receive News & Ratings for The Charles Schwab Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for The Charles Schwab Corporation and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply