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Stifel Financial Corp SF

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Morningstar’s Analysis

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Economic Moat




Stifel’s Revenue and Earnings Held Up Well in the Third Quarter; Shares Fairly Valued

Michael Wong, CFA, CPA Sector Director

Analyst Note

| Michael Wong, CFA, CPA |

Stifel Financial’s revenue and earnings are holding up well so far, as wealth management has largely recovered and its institutional securities business benefits from industrywide strong capital raising and trading activity. The company reported net income to common shareholders of $111 million, or $1.46 per diluted share, on $883 million of net revenue. Net revenue increased 7.5% from a year ago but decreased 1.4% sequentially. Revenue growth from the previous year came primarily from trading and capital raising, while acquisition advisory and net interest income declined. The sequential decline is from lower trading and net interest income. For the quarter, the company had a return on common equity of 12.8% and a return on tangible common equity of 20.4%. We don’t anticipate making a material change to our $59 fair value estimate for no-moat Stifel and assess shares are fairly valued.

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Company Profile

Business Description

Stifel Financial is a middle-market-focused investment bank that produces more than 90% of its revenue in the United States. Approximately 60% of the company's net revenue is derived from its global wealth management division, which supports over 2,000 financial advisors, with the remainder coming from its institutional securities business. Stifel has a history of being an active acquirer of other financial service firms.

501 North Broadway
St. Louis, MO, 63102-2188
T +1 314 342-2000
Sector Financial Services
Industry Capital Markets
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 8,300