Head to Head Review: Nomura (NMR) vs. Stifel Financial (SF)

Nomura (NYSE: NMR) and Stifel Financial (NYSE:SF) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Insider & Institutional Ownership

0.7% of Nomura shares are held by institutional investors. Comparatively, 87.2% of Stifel Financial shares are held by institutional investors. 5.1% of Stifel Financial shares are held 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.

Earnings and Valuation

This table compares Nomura and Stifel Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nomura $13.82 billion 1.28 $1.97 billion $0.57 9.04
Stifel Financial $2.93 billion 1.46 $182.87 million $3.99 14.96

Nomura has higher revenue and earnings than Stifel Financial. Nomura is trading at a lower price-to-earnings ratio than Stifel Financial, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Nomura has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Stifel Financial has a beta of 1.71, indicating that its stock price is 71% more volatile than the S&P 500.

Dividends

Nomura pays an annual dividend of $0.18 per share and has a dividend yield of 3.5%. Stifel Financial pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. Nomura pays out 31.6% of its earnings in the form of a dividend. Stifel Financial pays out 12.0% 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Nomura and Stifel Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nomura 0 0 3 0 3.00
Stifel Financial 0 1 4 0 2.80

Stifel Financial has a consensus price target of $76.33, suggesting a potential upside of 27.88%. Given Stifel Financial’s higher possible upside, analysts clearly believe Stifel Financial is more favorable than Nomura.

Profitability

This table compares Nomura and Stifel Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nomura 11.88% 7.62% 0.51%
Stifel Financial 6.87% 13.14% 1.73%

Summary

Stifel Financial beats Nomura on 11 of the 16 factors compared between the two stocks.

About Nomura

Nomura Holdings, Inc. provides various financial services to individuals, corporations, financial institutions, governments, and governmental agencies worldwide. It operates through three segments: Retail, Asset Management, and Wholesale. The Retail segment offers various financial products and investment services for individuals and corporations. As of March 31, 2017, this segment operated a network of 158 branches. The Asset Management segment is involved in the development and management of investment trusts, which offers low risk/low return products and high risk/high return products, as well as products for various investor needs; and provision of investment advisory services to public pension funds, private pension funds, governments and their agencies, central banks, and institutional investors. The Wholesale segment engages in the research, sale, trading, and market-making of fixed income and equity-related products. It is also involved in underwriting various securities and other financial instruments, which include various stocks, convertible and exchangeable securities, investment grade debts, sovereign and emerging market debts, high yield debt, structured securities, and other securities; arranging private placements, as well as other capital raising activities; and the provision of financial advisory services on business transactions, including mergers and acquisitions, divestitures, spin-offs, capital structuring, corporate defense activities, leveraged buyouts, and risk solutions. In addition, this segment offers various financial instruments, such as equity securities, debt securities, investment trusts, and variable annuity insurance products for the short, medium, and long-term. The company was formerly known as The Nomura Securities Co., Ltd. and changed its name to Nomura Holdings, Inc. in October 2001. Nomura Holdings, Inc. was founded in 1925 and is headquartered in Tokyo, Japan.

About Stifel Financial

Stifel Financial Corp., a financial services and bank holding company, provides retail and institutional wealth management, and investment banking services to individual investors, corporations, municipalities, and institutions in the United States, the United Kingdom, and rest of Europe. The company operates through three segments: Global Wealth Management, Institutional Group, and Other. It provides private client services, including securities transaction and financial planning services; institutional equity and fixed income sales, trading and research, and municipal finance services; investment banking services, such as mergers and acquisitions, public offerings, and private placements; and retail and commercial banking services comprising personal and commercial lending programs, as well as deposit accounts. The company also manages and participates in underwritings for corporate and public finance. Stifel Financial Corp. was founded in 1890 and is headquartered in St. Louis, Missouri.

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