Critical Comparison: Gamco Investors (GBL) vs. Piper Jaffray Companies (PJC)

Piper Jaffray Companies (NYSE: PJC) and Gamco Investors (NYSE:GBL) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Analyst Ratings

This is a summary of recent ratings and price targets for Piper Jaffray Companies and Gamco Investors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Piper Jaffray Companies 0 3 0 0 2.00
Gamco Investors 0 0 0 0 N/A

Piper Jaffray Companies presently has a consensus target price of $86.00, suggesting a potential upside of 10.97%. Given Piper Jaffray Companies’ higher possible upside, equities research analysts plainly believe Piper Jaffray Companies is more favorable than Gamco Investors.

Profitability

This table compares Piper Jaffray Companies and Gamco Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Piper Jaffray Companies -8.69% 11.88% 5.06%
Gamco Investors 22.16% -94.36% 55.78%

Volatility and Risk

Piper Jaffray Companies has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500. Comparatively, Gamco Investors has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Institutional & Insider Ownership

72.6% of Piper Jaffray Companies shares are held by institutional investors. Comparatively, 17.4% of Gamco Investors shares are held by institutional investors. 4.2% of Piper Jaffray Companies shares are held by insiders. Comparatively, 81.0% of Gamco Investors shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Piper Jaffray Companies and Gamco Investors’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Piper Jaffray Companies $895.19 million 1.32 -$61.93 million N/A N/A
Gamco Investors $360.52 million 2.16 $77.80 million N/A N/A

Gamco Investors has lower revenue, but higher earnings than Piper Jaffray Companies.

Dividends

Piper Jaffray Companies pays an annual dividend of $1.50 per share and has a dividend yield of 1.9%. Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Gamco Investors has increased its dividend for 6 consecutive years.

Summary

Piper Jaffray Companies beats Gamco Investors on 7 of the 13 factors compared between the two stocks.

About Piper Jaffray Companies

Piper Jaffray Companies operates as an investment bank and asset management firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. The company's Capital Markets segment offers investment banking and institutional sales, trading, and research services for various equity and fixed income products. It raises capital through equity and debt financings; provides advisory services relating to mergers and acquisitions, equity private placements, and debt and restructuring advisory services for corporate clients; underwrites debt issuances; and offers municipal financial advisory and loan placement services, as well as various over-the-counter derivative products. This segment also provides public finance investment banking capabilities that focus on state and local governments, cultural and social service non-profit entities, education, healthcare, hospitality, senior living, and transportation sectors. In addition, it offers equity and fixed income advisory and trade execution services for institutional investors, and government and non-profit entities; and is involved in trading activities for customer facilitation and strategic trading purposes. Further, this segment engages in merchant banking activities, which comprise equity or debt investments in late stage private companies, and investments in private equity funds and other firm investments' and has alternative asset management funds in merchant banking, energy, and senior living to invest firm capital, as well as to manage capital from outside investors. The Asset Management segment provides traditional asset management services with product offerings in equity securities and master limited partnerships to institutions and individuals through separately managed accounts, and open-end and closed-end funds. Piper Jaffray Companies was founded in 1895 and is headquartered in Minneapolis, Minnesota.

About Gamco Investors

GAMCO Investors, Inc. is a publicly owned holding investment manager. The firm also provides wealth management, investment advisory, institutional research, brokerage, dealer, underwriting, and distribution services to its clients. It provides its services to individuals including high net worth individuals, corporate pension and profit-sharing plans, foundations, endowments, jointly trust plans, municipalities, and investment companies. The firm, through its subsidiaries, manages separate client-focused equity, fixed income, and balanced portfolios. It also launches equity, fixed income, and balanced mutual funds and manages equity mutual funds for its clients. Through its subsidiaries, the firm invests in the public equity and fixed income markets across the globe. It invests in value stocks of companies. The firm employs fundamental analysis with a focus on bottom-up stock picking approach to create its portfolios. It conducts in-house research to make its investments. The firm was founded in 1976 and is based in Rye, New York with additional offices in Greenwich, Connecticut; Bannockburn, Illinois; and Tokyo, Japan. GAMCO Investors, Inc. operates as a subsidiary of GGCP, Inc.

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