Jefferies Financial Group (NYSE: JEF) and MITSUBISHI Chem/ADR (OTCMKTS:MTLHY) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Dividends

Jefferies Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.8%. MITSUBISHI Chem/ADR pays an annual dividend of $1.08 per share and has a dividend yield of 2.5%. Jefferies Financial Group pays out 24.2% of its earnings in the form of a dividend. MITSUBISHI Chem/ADR pays out 17.6% 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. MITSUBISHI Chem/ADR is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Jefferies Financial Group and MITSUBISHI Chem/ADR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Jefferies Financial Group 0.45% 4.80% 1.04%
MITSUBISHI Chem/ADR 5.67% 11.60% 4.62%

Institutional and Insider Ownership

0.0% of Jefferies Financial Group shares are held by institutional investors. Comparatively, 0.0% of MITSUBISHI Chem/ADR shares are held by institutional investors. 7.3% of Jefferies Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Jefferies Financial Group and MITSUBISHI Chem/ADR’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Jefferies Financial Group $11.44 billion 0.67 $171.72 million $1.65 13.47
MITSUBISHI Chem/ADR $33.63 billion 0.39 $1.91 billion $6.14 7.16

MITSUBISHI Chem/ADR has higher revenue and earnings than Jefferies Financial Group. MITSUBISHI Chem/ADR is trading at a lower price-to-earnings ratio than Jefferies Financial Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Jefferies Financial Group and MITSUBISHI Chem/ADR, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Jefferies Financial Group 0 0 0 0 N/A
MITSUBISHI Chem/ADR 0 0 0 0 N/A

Risk and Volatility

Jefferies Financial Group has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, MITSUBISHI Chem/ADR has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500.

Summary

MITSUBISHI Chem/ADR beats Jefferies Financial Group on 8 of the 12 factors compared between the two stocks.

About Jefferies Financial Group

Jefferies Group LLC and its subsidiaries operate as a securities and investment banking firm. The Company operates in two business segments: Capital Markets segment consists of the Company’s securities and commodities trading activities and its investment banking activities, and Asset Management segment includes asset management activities and related services. On July 1, 2011, the Company acquired the Bache Global Commodities Group from Prudential Financial, Inc., and as of November 30, 2011, the Company operated a futures commission merchant through Jefferies Bache, LLC in the United States and a global commodities and financial derivatives broker through Jefferies Bache Limited in the United Kingdom. Effective March 1, 2013, Leucadia National Corp (Leucadia) acquired the remaining 71.4% interest in Jefferies Group Inc . Effective March 1, 2013, Leucadia National Corp (Leucadia) acquired the remaining 71.4% interest in Jefferies Group Inc.

About MITSUBISHI Chem/ADR

Mitsubishi Chemical Holdings Corporation engages in the performance products, industrial materials, and health care businesses in Japan and internationally. It operates in five segments: Electronics Applications, Designed Materials, Health Care, Chemicals, and Polymers. The company offers thermoplastic elastomer, phenol and polycarbonate, bio-based engineering plastic, and polybutylene terephthalate products; acrylic and epoxy resins, sugar esters, and resin additives; optical clear adhesive sheets and films, optical polyvinyl alcohol films, color resists, and precision cleaning products; food packaging and acrylic, and sanitary films, as well as moisture-proof polyvinyl chloride sheets for tablet and capsule packaging; and artificial light-type plant growing systems, and fiber reinforced plastic and stainless steel panel water tanks, as well as water treatment components, equipment, and facilities. It also provides engineering plastics, carbon fiber and composite materials, alumina fibers, functional moldings and composites, and fibers and textiles; lithium-ion battery materials, phosphors, and scintillators; ethylene glycols, chemical derivatives, and polyethylene gasoline tanks; coke, carbon black, synthetic rubber, and carbon materials; methyl methacrylate monomers, acrylic molding materials, and acrylic sheets; oxygen, nitrogen, argon, and electronics material gases; and air separation units. In addition, the company offers treatment agents for autoimmune diseases; therapeutic agents for amyotrophic lateral sclerosis; vaccines, compact immunoanalyzers, capsules, diagnostic reagents and instruments, pharmaceutical equipment, and active pharmaceutical ingredients and intermediates; and self-health check services. Further, it provides computer peripheral and polymer processing products; and clinical testing and drug development, logistic and warehouse, and engineering and construction services. The company was founded in 2005 and is headquartered in Tokyo, Japan.

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