Financial Comparison: Raymond James Financial (RJF) & Goldman Sachs Group, Inc. (The) (GS)

Raymond James Financial (NYSE: RJF) and Goldman Sachs Group, Inc. (The) (NYSE:GS) are both large-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Dividends

Raymond James Financial pays an annual dividend of $0.88 per share and has a dividend yield of 1.2%. Goldman Sachs Group, Inc. (The) pays an annual dividend of $3.00 per share and has a dividend yield of 1.4%. Raymond James Financial pays out 20.9% of its earnings in the form of a dividend. Goldman Sachs Group, Inc. (The) pays out 15.7% 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. Raymond James Financial has increased its dividend for 5 consecutive years and Goldman Sachs Group, Inc. (The) has increased its dividend for 4 consecutive years. Goldman Sachs Group, Inc. (The) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Raymond James Financial and Goldman Sachs Group, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Raymond James Financial 9.78% 13.37% 2.19%
Goldman Sachs Group, Inc. (The) 26.44% 11.27% 0.96%

Earnings & Valuation

This table compares Raymond James Financial and Goldman Sachs Group, Inc. (The)’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Raymond James Financial $6.12 billion 1.77 $605.03 million $4.21 17.89
Goldman Sachs Group, Inc. (The) $32.25 billion 2.61 $7.37 billion $19.06 11.40

Goldman Sachs Group, Inc. (The) has higher revenue and earnings than Raymond James Financial. Goldman Sachs Group, Inc. (The) 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.

Volatility and Risk

Raymond James Financial has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500. Comparatively, Goldman Sachs Group, Inc. (The) has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Raymond James Financial and Goldman Sachs Group, Inc. (The), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Raymond James Financial 0 3 3 0 2.50
Goldman Sachs Group, Inc. (The) 1 14 11 0 2.38

Raymond James Financial presently has a consensus price target of $88.80, indicating a potential upside of 17.90%. Goldman Sachs Group, Inc. (The) has a consensus price target of $237.61, indicating a potential upside of 9.39%. Given Raymond James Financial’s stronger consensus rating and higher possible upside, equities analysts plainly believe Raymond James Financial is more favorable than Goldman Sachs Group, Inc. (The).

Institutional & Insider Ownership

70.0% of Raymond James Financial shares are held by institutional investors. Comparatively, 73.4% of Goldman Sachs Group, Inc. (The) shares are held by institutional investors. 11.2% of Raymond James Financial shares are held by insiders. Comparatively, 2.6% of Goldman Sachs Group, Inc. (The) shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Goldman Sachs Group, Inc. (The) beats Raymond James Financial on 9 of the 17 factors compared between the two stocks.

About Raymond James Financial

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.

About Goldman Sachs Group, Inc. (The)

The Goldman Sachs Group, Inc. is an investment banking, securities and investment management company that provides a range of financial services to corporations, financial institutions, governments and individuals. The Company operates in four business segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. The Investment Banking segment consists of financial advisory and underwriting. The Institutional Client Services segment makes markets and facilitates client transactions in fixed income, equity, currency and commodity products. The investing and lending activities, which are typically longer-term, include its investing and relationship lending activities across various asset classes, primarily debt securities and loans, public and private equity securities, infrastructure and real estate. The Investment Management segment provides investment and wealth advisory services. As of December 2016, it had offices in over 30 countries.

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