Jefferies Group (NYSE: JEF) and Morgan Stanley (NYSE:MS) are both investment banking & brokerage services – nec companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Analyst Ratings

This is a summary of current ratings for Jefferies Group and Morgan Stanley, as provided by

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jefferies Group 0 0 0 0 N/A
Morgan Stanley 1 6 14 2 2.74

Morgan Stanley has a consensus price target of $50.56, indicating a potential upside of 3.81%.

Earnings and Valuation

This table compares Jefferies Group and Morgan Stanley’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Jefferies Group N/A N/A N/A $1.09 N/A
Morgan Stanley $37.95 billion 2.32 $5.98 billion $3.62 13.45

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


This table compares Jefferies Group and Morgan Stanley’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jefferies Group N/A N/A N/A
Morgan Stanley 16.76% 10.07% 0.85%


Morgan Stanley pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Jefferies Group does not pay a dividend. Morgan Stanley pays out 27.6% of its earnings in the form of a dividend. Morgan Stanley has increased its dividend for 3 consecutive years.

Insider and Institutional Ownership

86.3% of Morgan Stanley shares are held by institutional investors. 0.4% of Morgan Stanley shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.


Morgan Stanley beats Jefferies Group on 11 of the 12 factors compared between the two stocks.

About Jefferies Group

Jefferies Group LLC and its subsidiaries operate as a securities and investment banking firm. The Company operates in two business segments: Capital Markets segment consists of the Company’s securities and commodities trading activities and its investment banking activities, and Asset Management segment includes asset management activities and related services. On July 1, 2011, the Company acquired the Bache Global Commodities Group from Prudential Financial, Inc., and as of November 30, 2011, the Company operated a futures commission merchant through Jefferies Bache, LLC in the United States and a global commodities and financial derivatives broker through Jefferies Bache Limited in the United Kingdom. Effective March 1, 2013, Leucadia National Corp (Leucadia) acquired the remaining 71.4% interest in Jefferies Group Inc . Effective March 1, 2013, Leucadia National Corp (Leucadia) acquired the remaining 71.4% interest in Jefferies Group Inc.

About Morgan Stanley

Morgan Stanley is a financial holding company. The Company’s segments include Institutional Securities, Wealth Management and Investment Management. The Company’s Institutional Securities business segment provides investment banking, sales and trading, and other services to corporations, governments, financial institutions and high-to-ultra high net worth clients. The Company’s Wealth Management business segment provides an array of financial services and solutions to individual investors and small-to-medium sized businesses and institutions covering brokerage and investment advisory services, market-making activities in fixed income securities, financial and wealth planning services, annuity and insurance products, credit and other lending products, banking and retirement plan services. The Company’s Investment Management business segment provides a range of investment strategies and products.

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