Contrasting GAMCO Investors (NYSE:GAMI) and Stifel Financial (NYSE:SF)

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

Valuation and Earnings

This table compares GAMCO Investors and Stifel Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAMCO Investors	$235.87 million	2.73	$60.21 million	$2.40	10.83
Stifel Financial	$4.35 billion	2.21	$522.54 million	$4.40	21.29

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

Risk and Volatility

GAMCO Investors has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500. Comparatively, Stifel Financial has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for GAMCO Investors and Stifel Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAMCO Investors	0	0	0	0	N/A
Stifel Financial	0	5	2	0	2.29

Stifel Financial has a consensus target price of $94.67, indicating a potential upside of 1.07%. Given Stifel Financial’s higher probable upside, analysts clearly believe Stifel Financial is more favorable than GAMCO Investors.

Insider & Institutional Ownership

3.3% of GAMCO Investors shares are owned by institutional investors. Comparatively, 82.0% of Stifel Financial shares are owned by institutional investors. 81.2% of GAMCO Investors shares are owned by company insiders. Comparatively, 4.6% of Stifel Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

GAMCO Investors pays an annual dividend of $0.16 per share and has a dividend yield of 0.6%. Stifel Financial pays an annual dividend of $1.68 per share and has a dividend yield of 1.8%. GAMCO Investors pays out 6.7% of its earnings in the form of a dividend. Stifel Financial pays out 38.2% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
GAMCO Investors	26.16%	33.04%	23.07%
Stifel Financial	11.59%	13.24%	1.61%

Summary

Stifel Financial beats GAMCO Investors on 9 of the 15 factors compared between the two stocks.

About GAMCO Investors

GAMCO Investors, Inc. is a publicly owned holding investment manager. The firm also provides wealth management, investment advisory, institutional research, brokerage, dealer, underwriting, and distribution services to its clients. It provides its services to individuals including high net worth individuals, corporate pension and profit-sharing plans, foundations, endowments, jointly trust plans, municipalities, and investment companies. The firm, through its subsidiaries, manages separate client-focused equity, fixed income, and balanced portfolios. It also launches equity, fixed income, and balanced mutual funds and manages equity mutual funds for its clients. Through its subsidiaries the firm invests in the public equity and fixed income markets across the globe. It invests in value stocks of companies. The firm employs fundamental analysis with a focus on bottom-up stock picking approach to create its portfolios. It conducts in-house research to make its investments. The firm was founded in 1976 and is based in Rye, New York with additional offices in Greenwich, Connecticut; Bannockburn, Illinois; and Tokyo, Japan. GAMCO Investors, Inc. operates as a subsidiary of Ggcp Holdings Llc.

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.