Head to Head Analysis: Stifel Financial (NYSE:SF) and Wells Fargo & Company (NYSE:WFC)

Wells Fargo & Company (NYSE:WFC) and Stifel Financial (NYSE:SF) are both large-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.

Earnings and Valuation

This table compares Wells Fargo & Company and Stifel Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Wells Fargo & Company	$83.70 billion	2.85	$21.34 billion	$6.27	12.32
Stifel Financial	$5.53 billion	1.98	$683.78 million	$3.92	18.05

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

Institutional and Insider Ownership

75.9% of Wells Fargo & Company shares are owned by institutional investors. Comparatively, 82.0% of Stifel Financial shares are owned by institutional investors. 0.1% of Wells Fargo & Company shares are owned by company insiders. Comparatively, 3.3% of Stifel Financial shares are owned by company 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.

Profitability

This table compares Wells Fargo & Company and Stifel Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wells Fargo & Company	17.27%	12.90%	1.05%
Stifel Financial	12.37%	15.53%	1.92%

Analyst Ratings

This is a summary of current recommendations for Wells Fargo & Company and Stifel Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wells Fargo & Company	0	10	13	1	2.63
Stifel Financial	0	5	6	0	2.55

Wells Fargo & Company presently has a consensus target price of $96.98, suggesting a potential upside of 25.56%. Stifel Financial has a consensus target price of $90.13, suggesting a potential upside of 27.41%. Given Stifel Financial’s higher possible upside, analysts plainly believe Stifel Financial is more favorable than Wells Fargo & Company.

Dividends

Wells Fargo & Company pays an annual dividend of $1.80 per share and has a dividend yield of 2.3%. Stifel Financial pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Wells Fargo & Company pays out 28.7% of its earnings in the form of a dividend. Stifel Financial pays out 34.7% 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. Wells Fargo & Company has raised its dividend for 4 consecutive years and Stifel Financial has raised its dividend for 9 consecutive years. Wells Fargo & Company is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Wells Fargo & Company has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Stifel Financial has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Summary

Wells Fargo & Company beats Stifel Financial on 10 of the 18 factors compared between the two stocks.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.

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 and internationally. It operates in three segments: Global Wealth Management, Institutional Group, and Other. The company 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. It participates in and manages underwritings for corporate and public finance; and offers financial advisory and securities brokerage services. The company was founded in 1890 and is headquartered in Saint Louis, Missouri.