Value Expert Banks on Stifel Financial

10/04/2017 5:00 am EST


Roy Ward

Chief Analyst, Cabot Benjamin Graham Value Investor

Stifel Financial (SF) offers securities-related financial services in the U.S., Canada and Europe through several wholly-owned subsidiaries, says Roy Ward, editor of Cabot Benjamin Graham Value Investor.

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One of the company’s subsidiary, Stifel Nicolaus, is a full-service retail and institutional brokerage and investment banking firm.

Three other subsidiaries include Thomas Weisel Partners, a growth focused investment banking firm; Century Securities Associates, an independent contractor broker-dealer firm; and Stifel Bank & Trust, a retail and commercial bank.


The company’s broker-dealer affiliates provide securities brokerage, trading, investment banking, investment advisory and related financial services to individual investors, professional money managers, businesses and municipalities.

Stifel Bank & Trust offers a full range of consumer and commercial lending solutions. Stifel Financial was founded way back in 1890 and has been headquartered in St. Louis, Missouri during its 127 years of existence.

Stifel Financial has acquired many businesses during its history. In recent years, the company purchased Keefe, Bruyette & Woods in 2013, Sterne Agee in 2015, Barclay’s U.S. Wealth Management division in 2015 and Eaton Partners in 2016.

Stifel recently acquired City Financial for an undisclosed amount. City Financial is an Indiana-based investment bank, specializing in public finance and wealth management.

The firm reported strong second-quarter results. Revenue rose 8% and EPS jumped 30%. Investment banking revenue soared 39% and asset management fees advanced 20% from a year ago. Management forecast continued success for the remainder of 2017.

The shares sell at 14.5 times current EPS, and the company maintains a solid balance sheet. The company’s low 1.22 P/BV (current price to book value) is attractive.

Stifel initiated a quarterly dividend of $0.10 in August, which provides a yield of 0.9%. I expect SF shares to rise 52% to my minimum sell price of $69.70 within two years. Buy at $47.40 or below.

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