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

Jefferies Group (NYSE: JEF) and The Charles Schwab (NYSE:SCHW) are both financials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, institutional ownership, profitability and risk.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Jefferies Group and The Charles Schwab, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jefferies Group 0 0 0 0 N/A
The Charles Schwab 0 6 10 0 2.63

The Charles Schwab has a consensus price target of $47.40, suggesting a potential downside of 7.20%.


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

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

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jefferies Group N/A N/A N/A $1.09 N/A
The Charles Schwab $7.48 billion 9.16 $1.89 billion $1.56 32.74

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


The Charles Schwab pays an annual dividend of $0.32 per share and has a dividend yield of 0.6%. Jefferies Group does not pay a dividend. The Charles Schwab pays out 20.5% of its earnings in the form of a dividend.

Institutional and Insider Ownership

79.8% of The Charles Schwab shares are held by institutional investors. 12.0% of The Charles Schwab shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.


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

Jefferies Group Company Profile

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.

The Charles Schwab Company Profile

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.

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