Financial Review: Jefferies Group (JEF) versus Nomura (NMR)
Jefferies Group (NYSE: JEF) and Nomura (NYSE:NMR) are both investment banking & brokerage services – nec companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.
Earnings & Valuation
This table compares Jefferies Group and Nomura’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Nomura||$12.98 billion||1.54||$2.23 billion||$0.59||9.86|
Nomura has higher revenue and earnings than Jefferies Group. Jefferies Group is trading at a lower price-to-earnings ratio than Nomura, indicating that it is currently the more affordable of the two stocks.
This table compares Jefferies Group and Nomura’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Nomura pays an annual dividend of $0.07 per share and has a dividend yield of 1.2%. Jefferies Group does not pay a dividend. Nomura pays out 11.9% of its earnings in the form of a dividend.
Institutional & Insider Ownership
0.6% of Nomura shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a breakdown of recent recommendations for Jefferies Group and Nomura, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Nomura beats Jefferies Group on 7 of the 9 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.
Nomura Holdings, Inc. (Nomura) is a financial services company. The Company, through its broker-dealer, banking and other financial services subsidiaries, provide investment, financing and related services to individual, institutional and government clients across the world. The Company’s segments include Retail, Asset Management and Wholesale. Its clients include individuals, corporations, financial institutions, governments and governmental agencies. The Company’s Retail segment provides investment consultation services to individual clients in Japan. The Company’s Asset Management segment develops and manages investment trusts, and provides investment advisory services. The Company’s Wholesale segment is engaged in the sales and trading of debt and equity securities, derivatives, and currencies on a global basis, and provides investment banking services, such as the underwriting of debt and equity securities, as well as mergers and acquisitions and financial advice.
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