Analyzing Jefferies Financial Group (NYSE:JEF) & WisdomTree (NYSE:WT)

Jefferies Financial Group (NYSE:JEF – Get Rating) and WisdomTree (NYSE:WT – Get Rating) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

66.0% of Jefferies Financial Group shares are owned by institutional investors. Comparatively, 74.3% of WisdomTree shares are owned by institutional investors. 20.1% of Jefferies Financial Group shares are owned by insiders. Comparatively, 7.8% of WisdomTree shares are owned 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.

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Profitability

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

Dividends

Jefferies Financial Group pays an annual dividend of $1.20 per share and has a dividend yield of 3.6%. WisdomTree pays an annual dividend of $0.12 per share and has a dividend yield of 1.7%. Jefferies Financial Group pays out 51.3% of its earnings in the form of a dividend. WisdomTree pays out 26.7% 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. Jefferies Financial Group has increased its dividend for 3 consecutive years. Jefferies Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Jefferies Financial Group and WisdomTree, as reported by MarketBeat.

Jefferies Financial Group currently has a consensus price target of $37.25, indicating a potential upside of 13.02%. WisdomTree has a consensus price target of $6.50, indicating a potential downside of 6.74%. Given Jefferies Financial Group’s higher probable upside, analysts plainly believe Jefferies Financial Group is more favorable than WisdomTree.

Volatility & Risk

Jefferies Financial Group has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, WisdomTree has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Valuation & Earnings

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

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

Summary

WisdomTree beats Jefferies Financial Group on 9 of the 17 factors compared between the two stocks.

About Jefferies Financial Group

(Get Rating)

Jefferies Financial Group, Inc. is a holding company, which engages in the provision of financial services. It operates through Investment Banking and Capital Markets, and Asset Management. The Investment Banking and Capital Markets segment provides investment banking, capital markets, and other related services. The Asset Management segment involves alternate investment management services to investors. The company was founded in 1968 and is headquartered in New York, NY.

About WisdomTree

(Get Rating)

WisdomTree, Inc., through its subsidiaries, operates as an exchange-traded funds (ETFs) sponsor and asset manager. It offers ETFs in equities, currency, fixed income, and alternatives asset classes. The company also licenses its indexes to third parties for proprietary products, as well as offers a platform to promote the use of WisdomTree ETFs in 401(k) plans. It develops index using its fundamentally weighted index methodology. In addition, the company provides investment advisory services. The company was founded in 1985 and is based in New York, New York.

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