Financial Review: Goldman Sachs Group (GS) and SEI Investments (SEIC)

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Goldman Sachs Group (NYSE: GS) and SEI Investments (NASDAQ:SEIC) are both large-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Volatility and Risk

Goldman Sachs Group has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, SEI Investments has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Goldman Sachs Group and SEI Investments, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Goldman Sachs Group 2 10 10 0 2.36
SEI Investments 0 2 3 0 2.60

Goldman Sachs Group currently has a consensus price target of $267.44, indicating a potential upside of 17.39%. SEI Investments has a consensus price target of $72.75, indicating a potential upside of 10.06%. Given Goldman Sachs Group’s higher probable upside, research analysts clearly believe Goldman Sachs Group is more favorable than SEI Investments.

Profitability

This table compares Goldman Sachs Group and SEI Investments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Goldman Sachs Group 14.27% 12.58% 0.99%
SEI Investments 28.97% 29.07% 24.02%

Earnings and Valuation

This table compares Goldman Sachs Group and SEI Investments’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Goldman Sachs Group $32.07 billion 2.68 $4.29 billion $19.76 11.53
SEI Investments $1.53 billion 6.84 $404.38 million $2.32 28.49

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

Institutional & Insider Ownership

72.4% of Goldman Sachs Group shares are owned by institutional investors. Comparatively, 70.0% of SEI Investments shares are owned by institutional investors. 1.7% of Goldman Sachs Group shares are owned by company insiders. Comparatively, 17.3% of SEI Investments 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.

Dividends

Goldman Sachs Group pays an annual dividend of $3.20 per share and has a dividend yield of 1.4%. SEI Investments pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. Goldman Sachs Group pays out 16.2% of its earnings in the form of a dividend. SEI Investments pays out 25.9% 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. Goldman Sachs Group has raised its dividend for 6 consecutive years and SEI Investments has raised its dividend for 8 consecutive years. Goldman Sachs Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Goldman Sachs Group beats SEI Investments on 9 of the 17 factors compared between the two stocks.

About Goldman Sachs Group

The Goldman Sachs Group, Inc. operates as an investment banking, securities, and investment management company worldwide. It operates through four segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. The Investment Banking segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, spin-offs, and risk management; and underwriting services, such as debt and equity underwriting of public offerings and private placements of various securities and other financial instruments, as well as derivative transactions with public and private sector clients. The Institutional Client Services segment is involved in client execution activities related to making markets in cash and derivative instruments for interest rate products, credit products, mortgages, currencies, commodities, and equities; and provision of securities services comprising financing, securities lending, and other prime brokerage services, as well as markets in and clears client transactions on primary stock, options, and futures exchanges. The Investing & Lending segment invests in and originates longer-term loans to provide financing to clients; and makes investments in debt securities and loans, public and private equity securities, and infrastructure and real estate entities, as well as provides unsecured and secured loans to retail clients through its digital platforms. The Investment Management segment offers investment management products and services; and wealth advisory services consisting of portfolio management, financial planning and counseling, and brokerage and other transaction services. The company serves corporations, financial institutions, governments, and individuals. The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in New York, New York.

About SEI Investments

SEI Investments Co. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides wealth management, retirement and investment solutions, asset management, asset administration, investment processing outsourcing solutions, financial services, and investment advisory services to its clients. It provides its services to private banks, independent financial advisers, institutional investors, investment managers, investment advisors, wealth management organizations, corporations, retirement scheme sponsors, not-for-profit organizations, hedge fund managers, registered investment advisers, independent broker-dealers, financial planners, life insurance agents, defined-benefit schemes, defined-contribution schemes, endowments, foundations, and board-designated fund, through its subsidiaries. Through its subsidiaries, the firm manages separate client-focused portfolios. It also launches and manages equity, fixed income, and balanced mutual funds, through its subsidiaries. Through its subsidiaries, the firm invests in public equity and fixed income markets. It employs fundamental and quantitative analysis with a focus on top-down and bottom-up analysis to make its investments, through its subsidiaries. SEI Investments Co. was founded in 1968 and is based in Oaks, Pennsylvania.

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