Charles Schwab (SCHW) versus JMP Group (JMP) Head-To-Head Survey

Charles Schwab (NYSE: SCHW) and JMP Group (NYSE:JMP) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Profitability

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This table compares Charles Schwab and JMP Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Charles Schwab 27.32% 16.03% 1.04%
JMP Group -14.48% 3.67% 0.43%

Risk & Volatility

Charles Schwab has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, JMP Group has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Valuation and Earnings

This table compares Charles Schwab and JMP Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Charles Schwab $8.62 billion 7.83 $2.35 billion $1.64 30.55
JMP Group $109.87 million 0.99 -$15.88 million $0.20 25.40

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

Analyst Recommendations

This is a summary of recent recommendations for Charles Schwab and JMP Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Charles Schwab 1 6 8 0 2.47
JMP Group 0 1 0 0 2.00

Charles Schwab currently has a consensus target price of $54.77, suggesting a potential upside of 9.30%. JMP Group has a consensus target price of $5.50, suggesting a potential upside of 8.27%. Given Charles Schwab’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Charles Schwab is more favorable than JMP Group.

Institutional and Insider Ownership

80.6% of Charles Schwab shares are owned by institutional investors. Comparatively, 13.7% of JMP Group shares are owned by institutional investors. 12.0% of Charles Schwab shares are owned by insiders. Comparatively, 52.1% of JMP 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.

Dividends

Charles Schwab pays an annual dividend of $0.40 per share and has a dividend yield of 0.8%. JMP Group pays an annual dividend of $0.36 per share and has a dividend yield of 7.1%. Charles Schwab pays out 24.4% of its earnings in the form of a dividend. JMP Group pays out 180.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Charles Schwab has increased its dividend for 2 consecutive years.

Summary

Charles Schwab beats JMP Group on 15 of the 17 factors compared between the two stocks.

Charles Schwab Company Profile

The Charles Schwab Corporation, through its subsidiaries, provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates through two segments, Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; and retail investor, retirement plan, and mutual fund clearing services. The Advisor Services segment provides custodial, trading, and support services; and retirement business and corporate brokerage retirement services. This segment provides brokerage accounts with cash management capabilities; third-party mutual funds, as well as proprietary mutual funds, plus mutual fund trading, and clearing services to broker-dealers; and exchange-traded funds (ETFs), including proprietary and third-party ETFs. It also offers advice solutions, such as managed portfolios of proprietary and third-party mutual funds and ETFs, separately managed accounts, customized personal advice for tailored portfolios, and specialized planning and portfolio management. In addition, this segment provides banking products and services, including checking and savings accounts, certificates of deposit, first lien residential real estate mortgage loans, home equity loans and lines of credit, and pledged asset lines; and trust services comprising trust custody services, personal trust reporting services, and administrative trustee services. The company serves individuals and institutional clients in the United States, the Commonwealth of Puerto Rico, England, Hong Kong, Singapore, and Australia. The Charles Schwab Corporation was founded in 1971 and is headquartered in San Francisco, California.

JMP Group Company Profile

JMP Group LLC, formerly JMP Group, Inc., is a full-service investment banking and asset management firm. The Company operates in five segments: Broker-Dealer, Asset Management, Corporate Credit, Investment Income and Corporate Costs. The Broker-Dealer segment includes a range of services, such as underwriting and acting as a placement agent for public and private capital markets raising transactions and financial advisory services in mergers and acquisitions, restructuring and other strategic transactions. The Asset Management segment includes the management of a range of pooled investment vehicles. The Corporate Credit segment includes the management of collateralized loan obligations and small business loans. The Investment Income segment includes income from the Company’s principal investments in public and private securities.

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