Critical Survey: Stifel Financial (NYSE:SF) versus Merriman (NYSE:MERR)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Merriman N/A N/A N/A
Stifel Financial 13.55% 14.68% 1.90%

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Merriman N/A N/A N/A N/A N/A
Stifel Financial $3.02 billion 1.36 $393.96 million $5.28 11.39

Stifel Financial has higher revenue and earnings than Merriman.

Institutional & Insider Ownership

85.3% of Stifel Financial shares are held by institutional investors. 63.0% of Merriman shares are held by insiders. Comparatively, 3.8% of Stifel Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Stifel Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.0%. Merriman does not pay a dividend. Stifel Financial pays out 11.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and target prices for Merriman and Stifel Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merriman 0 0 0 0 N/A
Stifel Financial 0 1 3 0 2.75

Stifel Financial has a consensus target price of $64.00, suggesting a potential upside of 6.40%. Given Stifel Financial’s higher probable upside, analysts plainly believe Stifel Financial is more favorable than Merriman.

Volatility & Risk

Merriman has a beta of 2.36, indicating that its share price is 136% more volatile than the S&P 500. Comparatively, Stifel Financial has a beta of 1.91, indicating that its share price is 91% more volatile than the S&P 500.

Summary

Stifel Financial beats Merriman on 8 of the 11 factors compared between the two stocks.

Merriman Company Profile

Merriman Holdings, Inc., through its subsidiary, Merriman Capital, Inc., provides capital market advisory and research, corporate, and investment banking services primarily in the United States and Canada. The company's investment banking services include corporate financing services, such as initial public offerings, secondary offerings, and private placements services; and strategic advisory services comprise transaction-specific advice regarding mergers and acquisitions, divestitures, spin-offs, and privatizations, as well as general strategic advice. It also offers institutional brokerage services, including institutional sales trading and equity execution, and options execution services to institutional clients. In addition, the company executes securities transactions for money managers, mutual funds, hedge funds, insurance companies, and pension and profit-sharing plans; and provides integrated research and trading solutions, as well as capital markets advisory services. It primarily serves institutional investors and corporate clients. The company was formerly known as Merriman Curhan Ford Group, Inc. and changed its name to Merriman Holdings, Inc. in August 2010. Merriman Holdings, Inc. was founded in 1987 and is headquartered in San Francisco, California.

Stifel Financial Company Profile

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, rest of Europe, and Asia. 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 participates and manages 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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