Critical Survey: State Street Corporation (STT) and Janus Capital Group (JNS)

State Street Corporation (NYSE: STT) and Janus Capital Group (NYSE:JNS) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Dividends

State Street Corporation pays an annual dividend of $1.52 per share and has a dividend yield of 1.6%. Janus Capital Group pays an annual dividend of $0.44 per share and has a dividend yield of 3.1%. State Street Corporation pays out 28.1% of its earnings in the form of a dividend. Janus Capital Group pays out 55.7% 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. State Street Corporation has increased its dividend for 6 consecutive years and Janus Capital Group has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for State Street Corporation and Janus Capital Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
State Street Corporation 1 9 3 1 2.29
Janus Capital Group 1 6 0 0 1.86

State Street Corporation presently has a consensus price target of $92.00, suggesting a potential downside of 2.17%. Janus Capital Group has a consensus price target of $14.20, suggesting a potential upside of 0.21%. Given Janus Capital Group’s higher probable upside, analysts clearly believe Janus Capital Group is more favorable than State Street Corporation.

Risk and Volatility

State Street Corporation has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Janus Capital Group has a beta of 1.6, suggesting that its share price is 60% more volatile than the S&P 500.

Profitability

This table compares State Street Corporation and Janus Capital Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
State Street Corporation 19.97% 12.49% 0.95%
Janus Capital Group 12.54% 7.26% 4.48%

Earnings and Valuation

This table compares State Street Corporation and Janus Capital Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
State Street Corporation $10.63 billion 3.31 $2.02 billion $5.40 17.41
Janus Capital Group N/A N/A N/A $0.79 17.94

State Street Corporation has higher revenue and earnings than Janus Capital Group. State Street Corporation is trading at a lower price-to-earnings ratio than Janus Capital Group, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

87.4% of State Street Corporation shares are held by institutional investors. Comparatively, 90.2% of Janus Capital Group shares are held by institutional investors. 0.7% of State Street Corporation shares are held by insiders. Comparatively, 2.1% of Janus Capital Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

State Street Corporation beats Janus Capital Group on 8 of the 14 factors compared between the two stocks.

About State Street Corporation

State Street Corporation is a financial holding company. The Company operates through two lines of business: Investment Servicing and Investment Management. The Company, through its subsidiary, State Street Bank and Trust Company (State Street Bank), provides a range of financial products and services to institutional investors across the world. Investment servicing line of business performs functions, such as providing institutional investors with clearing, settlement and payment services. The Company operates investment management line of business through State Street Global Advisors (SSGA). SSGA provides a range of investment management, investment research and investment advisory services to corporations, public funds and other investors. Its clients include mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments and investment managers.

About Janus Capital Group

Janus Capital Group Inc. provides investment management, administration, distribution and related services to financial advisors, individuals and institutional clients through mutual funds, separate accounts, other pooled investment vehicles, exchange-traded products (ETPs) and subadvised relationships (collectively referred to as investment products) in both domestic and international markets. The Company operates through investment management business segment. The Company provides investment management solutions across a range of disciplines, including fundamental the United States and global equities (growth and value), mathematical equities, fixed income and alternatives. As of December 31, 2016, the Company’s investment products were distributed through three primary channels: intermediary, institutional and self-directed. Each distribution channel focuses on specific investor groups and the requirements of each group.

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