Greenhill & Co., Inc. (GHL) versus Raymond James (RJF) Financial Analysis

Greenhill & Co., Inc. (NYSE: RJF) and Raymond James (NYSE:RJF) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Dividends

Greenhill & Co., Inc. pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. Raymond James pays an annual dividend of $1.20 per share and has a dividend yield of 1.3%. Greenhill & Co., Inc. pays out -71.4% of its earnings in the form of a dividend. Raymond James pays out 22.9% 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 has increased its dividend for 5 consecutive years. Raymond James is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Greenhill & Co., Inc. and Raymond James’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Greenhill & Co., Inc. -5.25% 3.15% 1.14%
Raymond James 10.87% 15.66% 2.60%

Analyst Ratings

This is a summary of current recommendations for Greenhill & Co., Inc. and Raymond James, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Greenhill & Co., Inc. 3 2 0 0 1.40
Raymond James 0 2 6 0 2.75

Greenhill & Co., Inc. currently has a consensus target price of $21.20, indicating a potential downside of 28.50%. Raymond James has a consensus target price of $104.57, indicating a potential upside of 14.61%. Given Raymond James’ stronger consensus rating and higher possible upside, analysts plainly believe Raymond James is more favorable than Greenhill & Co., Inc..

Institutional & Insider Ownership

99.6% of Greenhill & Co., Inc. shares are owned by institutional investors. Comparatively, 72.1% of Raymond James shares are owned by institutional investors. 15.6% of Greenhill & Co., Inc. shares are owned by insiders. Comparatively, 10.5% of Raymond James shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Greenhill & Co., Inc. and Raymond James’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Greenhill & Co., Inc. $239.18 million 2.80 -$26.65 million ($0.28) -105.89
Raymond James $6.52 billion 2.04 $636.23 million $5.23 17.45

Raymond James has higher revenue and earnings than Greenhill & Co., Inc.. Greenhill & Co., Inc. is trading at a lower price-to-earnings ratio than Raymond James, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Greenhill & Co., Inc. has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Raymond James has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500.

Summary

Raymond James beats Greenhill & Co., Inc. on 13 of the 17 factors compared between the two stocks.

Greenhill & Co., Inc. Company Profile

Greenhill & Co., Inc., together with its subsidiaries, operates as an independent investment bank for corporations, partnerships, institutions, and governments worldwide. The company provides financial advisory services primarily related to mergers and acquisitions, restructurings, financings, and capital raisings. It is also involved in the provision of advisory services to clients in relation to divestitures, spin-offs, and other strategic transactions, as well as various stages of these transactions ranging from initial structuring to final execution. In addition, the company advises clients on strategic matters, such as activist response, defensive tactics, special committee projects, licensing deals, joint ventures, valuation, negotiation tactics, industry dynamics, structuring alternatives, and timing and pricing of transactions, as well as financing alternatives. Further, it advises debtors, creditors, governments, pension funds, and other stakeholders in companies experiencing financial distress, as well as potential acquirers of distressed companies and assets. Additionally, the company assists the clients in identifying and capitalizing on potential incremental sources of value, as well as who seek court-assisted reorganizations by developing and seeking approval for plans of reorganization. It advises on capital structures and sales or recapitalizations; other financing matters, including debt issuances, equity financings, and exchange offers; and initial public offerings and other equity capital market transactions. The company also assists general partners and sponsors in raising capital for new private funds; and provides related advisory services to pension funds, sovereign wealth funds, endowments, and other institutional investors, as well as on primary and secondary market transactions, and real estate funds. Greenhill & Co., Inc. was founded in 1996 and is headquartered in New York, New York.

Raymond James Company Profile

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment provides corporate loans, SBL, tax-exempt loans, and residential loans. The Other segment engages in private equity activities, including various direct and third party private equity investments; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is based in St. Petersburg, Florida.

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