Head-To-Head Review: Greenhill & Co. (GHL) vs. Piper Jaffray Companies (PJC)

Piper Jaffray Companies (NYSE: PJC) and Greenhill & Co. (NYSE:GHL) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitabiliy, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Piper Jaffray Companies and Greenhill & Co., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Piper Jaffray Companies 2 2 0 0 1.50
Greenhill & Co. 5 1 0 0 1.17

Piper Jaffray Companies currently has a consensus target price of $21.75, suggesting a potential downside of 64.98%. Greenhill & Co. has a consensus target price of $21.33, suggesting a potential upside of 2.07%. Given Greenhill & Co.’s higher probable upside, analysts clearly believe Greenhill & Co. is more favorable than Piper Jaffray Companies.

Volatility and Risk

Piper Jaffray Companies has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500. Comparatively, Greenhill & Co. has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Dividends

Piper Jaffray Companies pays an annual dividend of $1.25 per share and has a dividend yield of 2.0%. Greenhill & Co. pays an annual dividend of $1.80 per share and has a dividend yield of 8.6%. Piper Jaffray Companies pays out -143.7% of its earnings in the form of a dividend. Greenhill & Co. pays out 102.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Piper Jaffray Companies and Greenhill & Co.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Piper Jaffray Companies -0.80% 8.84% 3.41%
Greenhill & Co. 17.09% 20.42% 13.50%

Institutional and Insider Ownership

70.0% of Piper Jaffray Companies shares are held by institutional investors. Comparatively, 97.7% of Greenhill & Co. shares are held by institutional investors. 5.4% of Piper Jaffray Companies shares are held by company insiders. Comparatively, 8.3% of Greenhill & Co. shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Piper Jaffray Companies and Greenhill & Co.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Piper Jaffray Companies $794.32 million 1.18 -$13.10 million ($0.87) -71.38
Greenhill & Co. $322.28 million 1.92 $51.76 million $1.75 11.94

Greenhill & Co. has higher revenue, but lower earnings than Piper Jaffray Companies. Piper Jaffray Companies is trading at a lower price-to-earnings ratio than Greenhill & Co., indicating that it is currently the more affordable of the two stocks.

Summary

Greenhill & Co. beats Piper Jaffray Companies on 11 of the 15 factors compared between the two stocks.

Piper Jaffray Companies Company Profile

Piper Jaffray Companies is an investment bank and asset management company. The Company’s segments include Capital Markets and Asset Management. The Capital Markets segment provides investment banking and institutional sales, trading and research services for various equity and fixed income products. The Asset Management segment includes its traditional asset management business and its investments in registered funds and private funds or partnerships that it manages. It provides a range of products and services, including equity and debt capital markets products; public finance services; financial advisory services; equity and fixed income institutional brokerage; equity and fixed income research, and asset management services. The Company serves the needs of corporations, private equity groups, public entities, non-profit entities and institutional investors in the United States and internationally.

Greenhill & Co. Company Profile

Greenhill & Co., Inc. is an investment bank. The Company provides financial and strategic advice on domestic and cross-border mergers and acquisitions, divestitures, restructurings, financings, capital raising and other transactions to a diverse client base, including corporations, partnerships, institutions and governments globally. The Company also provides advice in connection with defense preparedness, activist response strategies and other mission critical situations. The Company acts for clients located across the world from its offices located in the United States, Australia, Brazil, Canada, Germany, Hong Kong, Japan, Sweden, and the United Kingdom. The Company’s subsidiaries provide advisory services in various jurisdictions. Its operating entities include Greenhill & Co., LLC (G&Co), Greenhill & Co. International LLP (GCI), Greenhill & Co. Europe LLP (GCE), Greenhill & Co. Australia Pty Limited (Greenhill Australia) and Greenhill Cogent, LP (GC LP).

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