BGC Partners (NASDAQ:BGCP) and The Goldman Sachs Group (NYSE:GS) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.
Dividends
BGC Partners pays an annual dividend of $0.04 per share and has a dividend yield of 0.7%. The Goldman Sachs Group pays an annual dividend of $5.00 per share and has a dividend yield of 1.5%. BGC Partners pays out 6.6% of its earnings in the form of a dividend. The Goldman Sachs Group pays out 23.8% 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. BGC Partners has increased its dividend for 1 consecutive years and The Goldman Sachs Group has increased its dividend for 1 consecutive years.
Valuation and Earnings
This table compares BGC Partners and The Goldman Sachs Group's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
BGC Partners | $2.10 billion | 1.04 | $55.71 million | $0.61 | 9.69 |
The Goldman Sachs Group | $53.92 billion | 2.20 | $8.47 billion | $21.03 | 16.31 |
The Goldman Sachs Group has higher revenue and earnings than BGC Partners. BGC Partners is trading at a lower price-to-earnings ratio than The Goldman Sachs Group, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
BGC Partners has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500. Comparatively, The Goldman Sachs Group has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500.
Profitability
This table compares BGC Partners and The Goldman Sachs Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
BGC Partners | 2.21% | 40.10% | 6.47% |
The Goldman Sachs Group | 16.65% | 11.23% | 0.83% |
Insider and Institutional Ownership
45.7% of BGC Partners shares are held by institutional investors. Comparatively, 68.1% of The Goldman Sachs Group shares are held by institutional investors. 30.5% of BGC Partners shares are held by insiders. Comparatively, 0.6% of The Goldman Sachs Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings and target prices for BGC Partners and The Goldman Sachs Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
BGC Partners | 0 | 0 | 0 | 0 | N/A |
The Goldman Sachs Group | 1 | 5 | 15 | 0 | 2.67 |
The Goldman Sachs Group has a consensus price target of $349.1429, suggesting a potential upside of 1.76%. Given The Goldman Sachs Group's higher probable upside, analysts plainly believe The Goldman Sachs Group is more favorable than BGC Partners.
Summary
The Goldman Sachs Group beats BGC Partners on 9 of the 15 factors compared between the two stocks.