Critical Analysis: P10 (NYSE:RPC) vs. Piper Sandler Companies (NYSE:PIPR)

Piper Sandler Companies (NYSE:PIPR) and P10 (NYSE:RPC) are both financial services companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Piper Sandler Companies and P10, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Piper Sandler Companies	1	2	2	1	2.50
P10	0	1	1	1	3.00

Piper Sandler Companies presently has a consensus price target of $389.67, suggesting a potential upside of 20.51%. P10 has a consensus price target of $11.00, suggesting a potential upside of 26.44%. Given P10’s stronger consensus rating and higher probable upside, analysts clearly believe P10 is more favorable than Piper Sandler Companies.

Institutional & Insider Ownership

72.8% of Piper Sandler Companies shares are held by institutional investors. Comparatively, 48.1% of P10 shares are held by institutional investors. 2.7% of Piper Sandler Companies shares are held by company insiders. Comparatively, 11.5% of P10 shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Piper Sandler Companies and P10″s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Piper Sandler Companies	$1.90 billion	3.00	$281.33 million	$15.81	20.45
P10	$297.35 million	3.22	$19.50 million	($2.89)	-3.01

Piper Sandler Companies has higher revenue and earnings than P10. P10 is trading at a lower price-to-earnings ratio than Piper Sandler Companies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Piper Sandler Companies and P10’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Piper Sandler Companies	14.77%	22.50%	15.90%
P10	6.86%	26.05%	11.01%

Dividends

Piper Sandler Companies pays an annual dividend of $2.80 per share and has a dividend yield of 0.9%. P10 pays an annual dividend of $0.15 per share and has a dividend yield of 1.7%. Piper Sandler Companies pays out 17.7% of its earnings in the form of a dividend. P10 pays out -5.2% 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. Piper Sandler Companies has increased its dividend for 1 consecutive years. P10 is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Piper Sandler Companies has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500. Comparatively, P10 has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.

Summary

Piper Sandler Companies beats P10 on 9 of the 17 factors compared between the two stocks.

About Piper Sandler Companies

Piper Sandler Companies operates as an investment bank and institutional securities firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. The company offers investment banking and institutional sales, trading, and research services for various equity and fixed income products. It provides advisory services, such as mergers and acquisitions, equity private placements, and debt and restructuring advisory; raises capital through equity and debt financings; underwrites municipal issuances; and offers municipal financial advisory and loan placement services, as well as various over-the-counter derivative products. The company also offers public finance investment banking services that focus on state and local governments, and cultural and social service non-profit entities, as well as the education, healthcare, hospitality, senior living, and transportation sectors. In addition, it provides equity and fixed income advisory and trade execution services for institutional investors, and government and non-profit entities. Further, the company is involved in the alternative asset management funds merchant banking and healthcare to invest firm capital and to manage capital from outside investors, as well as trading activities. The company was formerly known as Piper Jaffray Companies and changed its name to Piper Sandler Companies in January 2020. Piper Sandler Companies was founded in 1895 and is headquartered in Minneapolis, Minnesota.

About P10

P10, Inc., together with its subsidiaries, operates as a multi-asset class private market solutions provider in the alternative asset management industry in the United States. The company offers private equity, venture capital, private credit, impact investing, and private credit services, as well as primary fund of funds, secondary investment, and direct and co-investments services. It also provides tax credit transaction and consulting services. The company was founded in 1992 and is headquartered in Dallas, Texas.