Contrasting Cowen (COWN) and Jefferies Group (JEF)

Cowen (NASDAQ: COWN) and Jefferies Group (NYSE:JEF) are both financials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for Cowen and Jefferies Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cowen 0 1 1 0 2.50
Jefferies Group 0 0 0 0 N/A

Cowen presently has a consensus target price of $17.00, indicating a potential upside of 19.30%.

Valuation & Earnings

This table compares Cowen and Jefferies Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cowen $658.78 million 0.64 -$60.88 million ($0.67) -21.27
Jefferies Group N/A N/A N/A $1.09 N/A

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

Institutional & Insider Ownership

80.4% of Cowen shares are held by institutional investors. 4.9% of Cowen shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Cowen -9.24% 1.94% 0.63%
Jefferies Group N/A N/A N/A

Summary

Cowen beats Jefferies Group on 6 of the 8 factors compared between the two stocks.

Cowen Company Profile

Cowen Inc., formerly Cowen Group, Inc., is a financial services company. The Company provides alternative investment management, investment banking, research, sales and trading, and prime brokerage services. It operates through two segments: alternative investment and broker-dealer. The alternative investment segment includes private equity structures, registered investment companies and listed investment vehicles. The broker-dealer segment offers industry focused investment banking for growth-oriented companies, including advisory and global capital markets origination and domain knowledge-driven research, and a sales and trading platform for institutional investors. Its alternative investment platform, which operates under the Ramius name, offers investment products and solutions across the liquidity spectrum to institutional and private clients. Ramius offers investors access to strategies to meet their specific needs, including long/short equity and event driven equity.

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.

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