Financial Review: Credit Suisse Group (NYSE:CS) & Jefferies Financial Group (NYSE:JEF)

Credit Suisse Group (NYSE:CS) and Jefferies Financial Group (NYSE:JEF) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitability.

Analyst Ratings

This is a summary of current recommendations and price targets for Credit Suisse Group and Jefferies Financial Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Credit Suisse Group 1 5 2 0 2.13
Jefferies Financial Group 0 0 1 0 3.00

Credit Suisse Group presently has a consensus target price of $16.00, suggesting a potential upside of 33.67%. Jefferies Financial Group has a consensus target price of $29.50, suggesting a potential upside of 53.41%. Given Jefferies Financial Group’s stronger consensus rating and higher probable upside, analysts plainly believe Jefferies Financial Group is more favorable than Credit Suisse Group.

Risk & Volatility

Credit Suisse Group has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, Jefferies Financial Group has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Credit Suisse Group $34.28 billion 0.89 $2.07 billion $0.84 14.25
Jefferies Financial Group $5.01 billion 1.14 $1.03 billion $0.81 23.74

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

Profitability

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

Net Margins Return on Equity Return on Assets
Credit Suisse Group 6.27% 4.82% 0.27%
Jefferies Financial Group N/A N/A N/A

Dividends

Credit Suisse Group pays an annual dividend of $0.26 per share and has a dividend yield of 2.2%. Jefferies Financial Group pays an annual dividend of $0.50 per share and has a dividend yield of 2.6%. Credit Suisse Group pays out 31.0% of its earnings in the form of a dividend. Jefferies Financial Group pays out 61.7% 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.

Institutional & Insider Ownership

76.0% of Jefferies Financial Group shares are owned by institutional investors. 10.0% of Jefferies Financial Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Credit Suisse Group beats Jefferies Financial Group on 9 of the 16 factors compared between the two stocks.

Credit Suisse Group Company Profile

Credit Suisse Group AG, through its subsidiaries, provides various financial services worldwide. It operates through Swiss Universal Bank, International Wealth Management, Asia Pacific, Global Markets, and Investment Banking & Capital Markets segments. The company offers private banking and wealth management solutions, including advisory, investment, financial planning, succession planning, and trust services; and financing and lending, and multi-shore platform solutions. It also provides traditional and structured lending, payment, foreign exchange, capital goods leasing, merger and acquisition, syndication, structured finance, commodity trade finance, trade finance, structured trade finance, export finance, factoring, fund management and administration, fund design, custody, ship and aviation, securities, cash, and treasury services. In addition, the company offers asset management products; equity and debt underwriting, and advisory services; cash equities, equity derivatives, and convertibles, as well as other services; and fixed income products, such as credit, securitized, macro, emerging markets, financing, structured credit, and other products. Further, it provides HOLT, a framework for assessing the performance of approximately 20,000 companies; and equity and fixed income research services. As of December 31, 2018, the company had 355 offices and branches. It serves private, corporate, and institutional clients; ultra-high-net-worth individuals, high-net-worth individuals, and affluent and retail clients; corporate clients, small and medium-sized enterprises, external asset managers, financial institutions, and commodity traders; and pension funds, governments, foundations and endowments, corporations, entrepreneurs, private individuals, financial sponsors, and sovereign clients. Credit Suisse Group AG was founded in 1856 and is based in Zurich, Switzerland.

Jefferies Financial Group Company Profile

Jefferies Financial Group Inc., a financial services company, engages in investment banking and capital markets, asset management, and direct investing businesses in the Americas, Europe, and Asia. the company also offers equities research, sales, and trading services; equity finance services comprising financing, securities lending, and other prime brokerage services; and wealth management services to high net worth individuals, their families and businesses, private equity and venture funds, and small institutions. In addition, it provides fixed income sales and trading services for investment grade corporate bonds, U.S. and European government and agency securities, municipal bonds, mortgage- and asset-backed securities, leveraged loans, consumer loans, securities, markets debt, interest rate, and credit derivative products, as well as foreign exchange trade execution and securitization capabilities, as well as manages, invests in, and provides services to a group of alternative asset management platforms in investment strategies and asset classes. The company was formerly known as Leucadia National Corporation and changed its name to Jefferies Financial Group Inc. in May 2018. Jefferies Financial Group Inc. was founded in 1968 and is headquartered in New York, New York.

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