Jefferies Financial Group (NYSE:JEF) and SEI Investments (NYSE:SEIC) Critical Comparison

Jefferies Financial Group (NYSE:JEF) and SEI Investments (NASDAQ:SEIC) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Analyst Recommendations

This is a summary of current recommendations for Jefferies Financial Group and SEI Investments, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jefferies Financial Group 0 1 0 0 2.00
SEI Investments 0 3 1 0 2.25

Jefferies Financial Group presently has a consensus price target of $26.50, indicating a potential upside of 46.33%. SEI Investments has a consensus price target of $61.00, indicating a potential upside of 9.55%. Given Jefferies Financial Group’s higher probable upside, analysts clearly believe Jefferies Financial Group is more favorable than SEI Investments.

Volatility & Risk

Jefferies Financial Group has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, SEI Investments has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Dividends

Jefferies Financial Group pays an annual dividend of $0.50 per share and has a dividend yield of 2.8%. SEI Investments pays an annual dividend of $0.66 per share and has a dividend yield of 1.2%. Jefferies Financial Group pays out 61.7% of its earnings in the form of a dividend. SEI Investments pays out 21.0% 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. SEI Investments has raised its dividend for 9 consecutive years.

Insider and Institutional Ownership

74.9% of Jefferies Financial Group shares are held by institutional investors. Comparatively, 69.7% of SEI Investments shares are held by institutional investors. 10.0% of Jefferies Financial Group shares are held by insiders. Comparatively, 22.6% of SEI Investments shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Jefferies Financial Group and SEI Investments’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jefferies Financial Group $5.01 billion 1.08 $1.03 billion $0.81 22.36
SEI Investments $1.62 billion 5.18 $505.87 million $3.14 17.73

Jefferies Financial Group has higher revenue and earnings than SEI Investments. SEI Investments 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 Jefferies Financial Group and SEI Investments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jefferies Financial Group N/A N/A N/A
SEI Investments 29.85% 29.86% 24.81%

Summary

SEI Investments beats Jefferies Financial Group on 10 of the 17 factors compared between the two stocks.

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.

SEI Investments Company Profile

SEI Investments Company is a publicly owned asset management holding company. Through its subsidiaries, the firm provides wealth management, retirement and investment solutions, asset management, asset administration, investment processing outsourcing solutions, financial services, and investment advisory services to its clients. It provides its services to private banks, independent financial advisers, institutional investors, investment managers, investment advisors, wealth management organizations, corporations, retirement scheme sponsors, not-for-profit organizations, hedge fund managers, registered investment advisers, independent broker-dealers, financial planners, life insurance agents, defined-benefit schemes, defined-contribution schemes, endowments, foundations, and board-designated fund, through its subsidiaries. Through its subsidiaries, the firm manages separate client-focused portfolios. It also launches and manages equity, fixed income, and balanced mutual funds, through its subsidiaries. Through its subsidiaries, the firm invests in public equity and fixed income markets. It employs fundamental and quantitative analysis with a focus on top-down and bottom-up analysis to make its investments, through its subsidiaries. SEI Investments Company was founded in 1968 and is based in Oaks, Pennsylvania.

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