Critical Contrast: Sprott (SII) and Its Peers

Sprott (NYSE:SII) is one of 1,744 publicly-traded companies in the “Capital Markets” industry, but how does it compare to its rivals? We will compare Sprott to related businesses based on the strength of its earnings, risk, analyst recommendations, valuation, institutional ownership, dividends and profitability.

Insider & Institutional Ownership

28.3% of Sprott shares are held by institutional investors. Comparatively, 30.5% of shares of all “Capital Markets” companies are held by institutional investors. 18.3% of Sprott shares are held by insiders. Comparatively, 12.9% of shares of all “Capital Markets” companies 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.

Earnings and Valuation

This table compares Sprott and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Sprott	$285.08 million	$67.35 million	27.62
Sprott Competitors	$2.39 billion	$398.52 million	17.39

Sprott’s rivals have higher revenue and earnings than Sprott. Sprott is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Risk & Volatility

Sprott has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Sprott’s rivals have a beta of 0.81, suggesting that their average share price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Sprott and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprott	0	1	2	0	2.67
Sprott Competitors	5550	20114	22442	642	2.37

Sprott currently has a consensus price target of $230.00, indicating a potential upside of 104.07%. As a group, “Capital Markets” companies have a potential upside of 23.35%. Given Sprott’s stronger consensus rating and higher probable upside, research analysts plainly believe Sprott is more favorable than its rivals.

Dividends

Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.4%. Sprott pays out 39.2% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 30.0% of their earnings in the form of a dividend. Sprott has increased its dividend for 1 consecutive years. Sprott lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Profitability

This table compares Sprott and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprott	26.36%	28.40%	20.95%
Sprott Competitors	321.05%	79.19%	3.72%

Summary

Sprott rivals beat Sprott on 8 of the 15 factors compared.

Sprott Company Profile

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.