Critical Analysis: Site Centers (NYSE:SITC) versus LPL Financial (NASDAQ:LPLA)

LPL Financial (NASDAQ:LPLA) and Site Centers (NYSE:SITC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Volatility & Risk

LPL Financial has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Site Centers has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for LPL Financial and Site Centers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LPL Financial	0	3	14	0	2.82
Site Centers	2	1	0	0	1.33

LPL Financial presently has a consensus target price of $409.69, suggesting a potential upside of 27.28%. Site Centers has a consensus target price of $3.50, suggesting a potential downside of 3.18%. Given LPL Financial’s stronger consensus rating and higher probable upside, research analysts clearly believe LPL Financial is more favorable than Site Centers.

Profitability

This table compares LPL Financial and Site Centers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LPL Financial	5.13%	32.20%	9.35%
Site Centers	219.18%	40.56%	27.81%

Earnings & Valuation

This table compares LPL Financial and Site Centers”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LPL Financial	$16.99 billion	1.49	$863.02 million	$12.54	25.67
Site Centers	$113.49 million	1.67	$177.86 million	$2.41	1.50

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

Institutional & Insider Ownership

95.7% of LPL Financial shares are owned by institutional investors. Comparatively, 88.7% of Site Centers shares are owned by institutional investors. 0.6% of LPL Financial shares are owned by insiders. Comparatively, 0.2% of Site Centers shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

LPL Financial beats Site Centers on 9 of the 14 factors compared between the two stocks.

About LPL Financial

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at enterprises in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, fixed income, alternative investments, retirement and 529 education savings plans, and insurance. The company also provides fee-based platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market products; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.

About Site Centers

SITE Centers is an owner and manager of open-air shopping centers located in suburban, high household income communities. The Company is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol SITC.