Financial Survey: Sprott (NYSE:SII) and Lazard (NYSE:LAZ)

Lazard (NYSE:LAZ) and Sprott (NYSE:SII) are both mid-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Insider and Institutional Ownership

54.8% of Lazard shares are held by institutional investors. Comparatively, 28.3% of Sprott shares are held by institutional investors. 0.9% of Lazard shares are held by insiders. Comparatively, 18.3% of Sprott shares are held by 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Lazard and Sprott, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lazard	2	4	4	0	2.20
Sprott	0	1	2	0	2.67

Lazard currently has a consensus price target of $47.62, indicating a potential upside of 31.17%. Sprott has a consensus price target of $230.00, indicating a potential upside of 92.56%. Given Sprott’s stronger consensus rating and higher probable upside, analysts clearly believe Sprott is more favorable than Lazard.

Profitability

This table compares Lazard and Sprott’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lazard	6.95%	23.58%	4.63%
Sprott	26.36%	28.40%	20.95%

Risk & Volatility

Lazard has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Sprott has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Earnings and Valuation

This table compares Lazard and Sprott”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lazard	$3.28 billion	1.22	$236.83 million	$2.04	17.80
Sprott	$285.08 million	10.77	$67.35 million	$4.08	29.28

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

Dividends

Lazard pays an annual dividend of $2.00 per share and has a dividend yield of 5.5%. Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.3%. Lazard pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sprott pays out 39.2% of its earnings in the form of a dividend. Sprott has increased its dividend for 1 consecutive years.

Summary

Sprott beats Lazard on 11 of the 17 factors compared between the two stocks.

About Lazard

Lazard, Inc., together with its subsidiaries, operates as a financial advisory and asset management firm in North and South America, Europe, the Middle East, Asia, and Australia. It operates in two segments, Financial Advisory and Asset Management. The Financial Advisory segment offers financial advisory services, such as mergers and acquisitions, capital markets, shareholder, sovereign, geopolitical advisory, and other strategic advisory services, as well as restructuring and liability management, and capital raising and placement services. This segment offers its services to corporate, partnership, institutional, government, sovereign, and individual clients to various industry areas, including consumers, financial institutions, healthcare and life sciences, industrials, power and energy/infrastructure, real estate, technology, telecommunication, and media and entertainment. The Asset Management segment offers a range of investment solutions; investment and wealth management services in equity and fixed income strategies; asset allocation strategies; and alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries, and private clients. Lazard, Inc. was incorporated in 1848 and is headquartered in New York, New York.

About Sprott

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.