Lazard (NYSE: LAZ) and Investment Technology Group (NYSE:ITG) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, institutional ownership, valuation, risk and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Lazard and Investment Technology Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lazard 0 3 4 0 2.57
Investment Technology Group 0 1 1 0 2.50

Lazard currently has a consensus price target of $48.33, suggesting a potential upside of 1.67%. Investment Technology Group has a consensus price target of $20.50, suggesting a potential downside of 12.65%. Given Lazard’s stronger consensus rating and higher probable upside, research analysts plainly believe Lazard is more favorable than Investment Technology Group.

Valuation and Earnings

This table compares Lazard and Investment Technology Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lazard $2.64 billion 2.34 $454.18 million $3.50 13.58
Investment Technology Group $464.03 million 1.68 -$8.61 million ($0.26) -90.27

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

Insider and Institutional Ownership

72.2% of Lazard shares are held by institutional investors. Comparatively, 88.0% of Investment Technology Group shares are held by institutional investors. 2.5% of Lazard shares are held by company insiders. Comparatively, 2.4% of Investment Technology Group shares are held by company 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.

Risk and Volatility

Lazard has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500. Comparatively, Investment Technology Group has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500.

Dividends

Lazard pays an annual dividend of $1.64 per share and has a dividend yield of 3.4%. Investment Technology Group pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Lazard pays out 46.9% of its earnings in the form of a dividend. Investment Technology Group pays out -107.7% 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. Investment Technology Group has increased its dividend for 6 consecutive years.

Profitability

This table compares Lazard and Investment Technology Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lazard 17.16% 39.56% 10.99%
Investment Technology Group -1.77% 3.08% 1.42%

Summary

Lazard beats Investment Technology Group on 13 of the 17 factors compared between the two stocks.

Lazard Company Profile

Lazard Ltd (Lazard) is a financial advisory and asset management company. The Company operates through two segments: Financial Advisory and Asset Management. It serves a range of clients around the world, including corporations, governments, institutions, partnerships and individuals. The Financial Advisory business segment offers corporate, partnership, institutional, government, sovereign and individual clients across the globe a range of financial advisory services regarding mergers and acquisitions (M&A) and other strategic matters, restructurings, capital structure, capital raising and various other financial matters to corporate, partnership, institutional, government, sovereign and individual clients. The Asset Management business provides investment solutions and investment management services in equity and fixed income strategies, alternative investments and private equity funds to corporations, public funds and sovereign entities.

Investment Technology Group Company Profile

Investment Technology Group, Inc. (ITG) is a financial technology company that helps brokers and asset managers improve returns for investors around the world. The Company operates through four segments: U.S. Operations, Canadian Operations, European Operations and Asia Pacific Operations. These four segments provide categories of products and services, such as Execution Services, Workflow Technology and Analytics. Execution Services includes self-directed trading using algorithms, smart routing and matching through POSIT in cash equities, futures and options trading and portfolio trading and high-touch trading desks providing execution expertise. Workflow Technology includes trade order and execution management software applications in addition to network connectivity. Analytics includes tools enabling portfolio managers and traders to improve pre-trade, real-time and post-trade execution performance; portfolio construction and optimization decisions, and securities valuation.

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