Analyzing LPL Financial (NASDAQ:LPLA) & Siebert Financial (NASDAQ:SIEB)

LPL Financial (NASDAQ:LPLA) and Siebert Financial (NASDAQ:SIEB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Valuation & Earnings

This table compares LPL Financial and Siebert Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LPL Financial	$16.99 billion	1.51	$863.02 million	$11.20	28.63
Siebert Financial	$94.20 million	0.73	$5.12 million	($0.14)	-11.93

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

Risk and Volatility

LPL Financial has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Siebert Financial has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Institutional and Insider Ownership

95.7% of LPL Financial shares are held by institutional investors. Comparatively, 1.5% of Siebert Financial shares are held by institutional investors. 0.6% of LPL Financial shares are held by company insiders. Comparatively, 46.0% of Siebert Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for LPL Financial and Siebert Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LPL Financial	0	4	10	1	2.80
Siebert Financial	1	0	0	0	1.00

LPL Financial currently has a consensus target price of $397.92, indicating a potential upside of 24.09%. Given LPL Financial’s stronger consensus rating and higher probable upside, equities analysts clearly believe LPL Financial is more favorable than Siebert Financial.

Profitability

This table compares LPL Financial and Siebert Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LPL Financial	4.93%	31.26%	9.08%
Siebert Financial	-6.21%	-6.14%	-0.87%

Summary

LPL Financial beats Siebert Financial on 13 of the 15 factors compared between the two stocks.

About LPL Financial

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at enterprises in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, fixed income, alternative investments, retirement and 529 education savings plans, and insurance. The company also provides fee-based platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market products; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.

About Siebert Financial

Siebert Financial Corp., through its subsidiaries, engages in the retail brokerage and investment advisory businesses in the United States and Internationally. It offers self-directed trading, market making and fixed income investment, stock borrow, stock loan, equity compensation plans, wealth management, and financial advisory services; independent retail execution services; and retail customer services. The company also offers self-directed retirement accounts, as well as lends customers a portion of the market value of marginable securities held in the customer's account. In addition, the company provides data technology platform that offers various services, such as email and messaging, market data systems and third party trading systems, business productivity tools, and customer relationship management systems. Further, it offers a Robo-Advisor platform that provides clients with an automated wealth management solution; and various insurance products, such as fixed annuities, personal insurance, property and casualty insurance, natural disaster insurance, and life and disability. Siebert Financial Corp. was incorporated in 1934 and is headquartered in Miami Beach, Florida.