Cowen Group (NASDAQ: COWN) and Goldman Sachs Group, Inc. (The) (NYSE:GS) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.
Earnings and Valuation
This table compares Cowen Group and Goldman Sachs Group, Inc. (The)’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cowen Group||$444.43 million||1.15||-$2.78 million||($0.09)||-184.42|
|Goldman Sachs Group, Inc. (The)||$32.25 billion||2.77||$7.40 billion||$19.06||12.06|
Goldman Sachs Group, Inc. (The) has higher revenue and earnings than Cowen Group. Cowen Group is trading at a lower price-to-earnings ratio than Goldman Sachs Group, Inc. (The), indicating that it is currently the more affordable of the two stocks.
This table compares Cowen Group and Goldman Sachs Group, Inc. (The)’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Goldman Sachs Group, Inc. (The)||26.44%||11.27%||0.96%|
Insider and Institutional Ownership
81.6% of Cowen Group shares are owned by institutional investors. Comparatively, 73.3% of Goldman Sachs Group, Inc. (The) shares are owned by institutional investors. 6.2% of Cowen Group shares are owned by company insiders. Comparatively, 2.6% of Goldman Sachs Group, Inc. (The) shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Goldman Sachs Group, Inc. (The) pays an annual dividend of $3.00 per share and has a dividend yield of 1.3%. Cowen Group does not pay a dividend. Goldman Sachs Group, Inc. (The) pays out 15.7% of its earnings in the form of a dividend. Cowen Group has raised its dividend for 5 consecutive years.
Volatility and Risk
Cowen Group has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, Goldman Sachs Group, Inc. (The) has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.
This is a breakdown of current ratings for Cowen Group and Goldman Sachs Group, Inc. (The), as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Goldman Sachs Group, Inc. (The)||1||14||11||0||2.38|
Cowen Group presently has a consensus price target of $17.67, suggesting a potential upside of 6.43%. Goldman Sachs Group, Inc. (The) has a consensus price target of $237.61, suggesting a potential upside of 3.40%. Given Cowen Group’s higher probable upside, equities research analysts plainly believe Cowen Group is more favorable than Goldman Sachs Group, Inc. (The).
Goldman Sachs Group, Inc. (The) beats Cowen Group on 10 of the 16 factors compared between the two stocks.
About Cowen Group
Cowen Inc., formerly Cowen Group, Inc., is a financial services company. The Company provides alternative investment management, investment banking, research, sales and trading, and prime brokerage services. It operates through two segments: alternative investment and broker-dealer. The alternative investment segment includes private equity structures, registered investment companies and listed investment vehicles. The broker-dealer segment offers industry focused investment banking for growth-oriented companies, including advisory and global capital markets origination and domain knowledge-driven research, and a sales and trading platform for institutional investors. Its alternative investment platform, which operates under the Ramius name, offers investment products and solutions across the liquidity spectrum to institutional and private clients. Ramius offers investors access to strategies to meet their specific needs, including long/short equity and event driven equity.
About Goldman Sachs Group, Inc. (The)
The Goldman Sachs Group, Inc. is an investment banking, securities and investment management company that provides a range of financial services to corporations, financial institutions, governments and individuals. The Company operates in four business segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. The Investment Banking segment consists of financial advisory and underwriting. The Institutional Client Services segment makes markets and facilitates client transactions in fixed income, equity, currency and commodity products. The investing and lending activities, which are typically longer-term, include its investing and relationship lending activities across various asset classes, primarily debt securities and loans, public and private equity securities, infrastructure and real estate. The Investment Management segment provides investment and wealth advisory services. As of December 2016, it had offices in over 30 countries.
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