Head to Head Review: Noah (NYSE:NOAH) and Nomura (NYSE:NMR)

Nomura (NYSE:NMR) and Noah (NYSE:NOAH) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Nomura and Noah, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nomura	0	1	4	1	3.00
Noah	1	3	0	0	1.75

Nomura presently has a consensus target price of $10.20, suggesting a potential upside of 6.53%. Noah has a consensus target price of $9.85, suggesting a potential upside of 49.81%. Given Noah’s higher possible upside, analysts clearly believe Noah is more favorable than Nomura.

Dividends

Nomura pays an annual dividend of $0.24 per share and has a dividend yield of 2.5%. Noah pays an annual dividend of $0.63 per share and has a dividend yield of 9.6%. Nomura pays out 27.9% of its earnings in the form of a dividend. Noah pays out 51.2% 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.

Institutional & Insider Ownership

15.1% of Nomura shares are held by institutional investors. Comparatively, 42.7% of Noah shares are held by institutional investors. 0.0% of Nomura shares are held by company insiders. Comparatively, 47.2% of Noah shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Nomura and Noah’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nomura	8.06%	10.51%	0.63%
Noah	22.57%	6.37%	5.38%

Valuation & Earnings

This table compares Nomura and Noah”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nomura	$31.61 billion	0.89	$2.39 billion	$0.86	11.13
Noah	$373.26 million	1.20	$79.92 million	$1.23	5.35

Nomura has higher revenue and earnings than Noah. Noah is trading at a lower price-to-earnings ratio than Nomura, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Nomura has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Noah has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Summary

Nomura beats Noah on 9 of the 17 factors compared between the two stocks.

About Nomura

Nomura Holdings, Inc. is a Japan-based financial services group headquartered in Tokyo. Its roots date to 1925, when the securities business of Osaka Nomura Bank was established; the group has since grown into an international provider of financial services. Nomura’s main businesses include wealth management, asset management and wholesale services. It serves individual clients with investment products and advice, manages investment funds for individuals and institutions, and provides institutional clients with global markets services and investment banking capabilities, including trading, financing and advisory services.

About Noah

Noah Holdings Limited is a wealth and asset management services provider focused on high-net-worth individuals and families. The company offers wealth planning and advisory services, along with access to investment products and asset management solutions. Its offerings span multiple asset classes and include domestic and international investment opportunities. Noah serves clients primarily in China and also supports their global investment needs through its international operations. Founded in 2005, Noah is headquartered in Shanghai and has expanded its services beyond mainland China.