Raymond James (NYSE:RJF) vs. Futu (NYSE:FHL) Critical Analysis

Raymond James (NYSE:RJF) and Futu (NASDAQ:FHL) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and target prices for Raymond James and Futu, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Raymond James 0 3 5 0 2.63
Futu 0 2 0 0 2.00

Raymond James presently has a consensus target price of $94.00, suggesting a potential upside of 24.09%. Futu has a consensus target price of $17.62, suggesting a potential upside of 64.83%. Given Futu’s higher possible upside, analysts clearly believe Futu is more favorable than Raymond James.

Valuation & Earnings

This table compares Raymond James and Futu’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Raymond James $7.48 billion 1.41 $856.69 million $6.47 11.71
Futu N/A N/A N/A N/A N/A

Raymond James has higher revenue and earnings than Futu.

Dividends

Raymond James pays an annual dividend of $1.36 per share and has a dividend yield of 1.8%. Futu does not pay a dividend. Raymond James pays out 21.0% of its earnings in the form of a dividend. Raymond James has increased its dividend for 6 consecutive years.

Profitability

This table compares Raymond James and Futu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Raymond James 13.06% 16.12% 2.71%
Futu N/A N/A N/A

Insider and Institutional Ownership

70.1% of Raymond James shares are held by institutional investors. Comparatively, 4.1% of Futu shares are held by institutional investors. 10.7% of Raymond James shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Raymond James beats Futu on 10 of the 12 factors compared between the two stocks.

Raymond James Company Profile

Raymond James Financial, Inc., a financial holding company, through its subsidiaries, engages in the underwriting, distribution, trading, and brokerage of equity and debt securities, and the sale of mutual funds and other investment products in the United States, Canada, Europe, and internationally. The company operates through Private Client Group, Capital Markets, Asset Management, RJ Bank, and Other segments. The Private Client Group segment provides securities brokerage services, including the sale of equities, mutual funds, fixed income products, and insurance products to their individual clients; and borrowing and lending of securities to and from other broker-dealers, financial institutions, and other counterparties. The Capital Markets segment offers securities brokerage, trading, and research services to institutions with a focus on sale of the United States and Canadian equities and fixed income products; and manages and participates in underwritings, merger and acquisition services, and public finance activities. The Asset Management segment engages in the operations of Eagle, the Eagle Family of Funds, Cougar, the asset management operations of Raymond James & Associates, trust services of Raymond James Trust, and other fee-based asset management programs. The RJ Bank segment provides corporate loans, SBL, tax-exempt loans, and residential loans. The Other segment engages in private equity activities, including various direct and third party private equity investments; and private equity funds. Raymond James Financial, Inc. was founded in 1962 and is based in St. Petersburg, Florida.

Futu Company Profile

Futu Holdings Limited operates digitized brokerage platform in Hong Kong, China, Japan, the United States, and internationally. Its platform offers investing services, including trade execution and margin financing which allows to trade securities, such as stocks, warrants, options and exchange-traded funds, or ETFs, across different markets; market data and information; and securities lending services. The company was founded in 2011 and is headquartered in Sheung Wan, Hong Kong.

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