Analyzing Virtus Investment Partners (NASDAQ:VRTS) & Raymond James Financial (NYSE:RJF)

Raymond James Financial (NYSE:RJF) and Virtus Investment Partners (NASDAQ:VRTS) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Volatility & Risk

Raymond James Financial has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Virtus Investment Partners has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Earnings and Valuation

This table compares Raymond James Financial and Virtus Investment Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Raymond James Financial	$15.91 billion	1.93	$2.13 billion	$11.47	13.94
Virtus Investment Partners	$819.58 million	1.05	$121.75 million	$17.55	7.44

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

Institutional and Insider Ownership

83.8% of Raymond James Financial shares are held by institutional investors. Comparatively, 80.5% of Virtus Investment Partners shares are held by institutional investors. 0.6% of Raymond James Financial shares are held by insiders. Comparatively, 6.4% of Virtus Investment Partners shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Raymond James Financial and Virtus Investment Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Raymond James Financial	0	9	5	0	2.36
Virtus Investment Partners	2	2	1	0	1.80

Raymond James Financial currently has a consensus target price of $181.58, indicating a potential upside of 13.60%. Virtus Investment Partners has a consensus target price of $143.00, indicating a potential upside of 9.54%. Given Raymond James Financial’s stronger consensus rating and higher probable upside, research analysts plainly believe Raymond James Financial is more favorable than Virtus Investment Partners.

Dividends

Raymond James Financial pays an annual dividend of $2.16 per share and has a dividend yield of 1.4%. Virtus Investment Partners pays an annual dividend of $9.80 per share and has a dividend yield of 7.5%. Raymond James Financial pays out 18.8% of its earnings in the form of a dividend. Virtus Investment Partners pays out 55.8% 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. Raymond James Financial has increased its dividend for 3 consecutive years.

Profitability

This table compares Raymond James Financial and Virtus Investment Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Raymond James Financial	13.57%	19.07%	2.64%
Virtus Investment Partners	13.42%	21.56%	5.27%

Summary

Raymond James Financial beats Virtus Investment Partners on 11 of the 17 factors compared between the two stocks.

About Raymond James Financial

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment provides corporate loans, SBL, tax-exempt loans, and residential loans. The Other segment engages in private equity activities, including various direct and third party private equity investments; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is based in St. Petersburg, Florida.

About Virtus Investment Partners

Virtus Investment Partners, Inc. is a publicly owned investment manager. The firm primarily provides its services to individual and institutional clients. It launches separate client focused equity and fixed income portfolios. The firm launches equity, fixed income, and balanced mutual funds for its clients. It invests in the public equity, fixed income, and real estate markets. The firm also invests in exchange traded funds. It employs a multi manager approach for its products. The firm employs quantitative analysis to make its investments. It benchmarks the performance of its portfolios against the S&P 500 Index. The firm conducts in-house research to make its investments. Virtus Investment Partners, Inc. was founded in 1988 and is based in Hartford, Connecticut.