Nomura (NYSE:NMR – Get Free Report) and Rand Capital (NASDAQ:RAND – Get Free Report) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.
Analyst Ratings
This is a summary of recent ratings for Nomura and Rand Capital, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nomura | 0 | 1 | 3 | 1 | 3.00 |
| Rand Capital | 1 | 0 | 0 | 0 | 1.00 |
Nomura presently has a consensus price target of $10.20, indicating a potential downside of 2.35%. Given Nomura’s stronger consensus rating and higher probable upside, research analysts clearly believe Nomura is more favorable than Rand Capital.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nomura | $31.61 billion | 0.97 | $2.39 billion | $0.86 | 12.15 |
| Rand Capital | $6.47 million | 4.93 | -$8.04 million | ($0.04) | -268.75 |
Nomura has higher revenue and earnings than Rand Capital. Rand Capital is trading at a lower price-to-earnings ratio than Nomura, indicating that it is currently the more affordable of the two stocks.
Dividends
Nomura pays an annual dividend of $0.24 per share and has a dividend yield of 2.3%. Rand Capital pays an annual dividend of $1.16 per share and has a dividend yield of 10.8%. Nomura pays out 27.9% of its earnings in the form of a dividend. Rand Capital pays out -2,900.0% 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. Rand Capital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
Nomura has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Rand Capital has a beta of 0.11, indicating that its stock price is 89% less volatile than the S&P 500.
Profitability
This table compares Nomura and Rand Capital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nomura | 8.09% | 10.42% | 0.63% |
| Rand Capital | -2.67% | 5.47% | 5.23% |
Insider & Institutional Ownership
15.1% of Nomura shares are held by institutional investors. 0.0% of Nomura shares are held by company insiders. Comparatively, 68.2% of Rand Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Nomura beats Rand Capital on 12 of the 17 factors compared between the two stocks.
About Nomura
Nomura Holdings, Inc. provides various financial services to individuals, corporations, financial institutions, governments, and governmental agencies worldwide. It operates through three segments: Retail, Investment Management, and Wholesale. The Retail segment offers various financial products and investment consultation services. The Investment Management segment engages in the management of funds, investment trusts, and other investment solutions; and provision of investment advisory, custodial, and administrative services. The Wholesale segment is involved in the research, sale, trading, agency execution, and market-making of fixed income and equity-related products. This segment also engages in underwriting various securities and other financial instruments, such as various classes of shares, convertible and exchangeable securities, investment grade and high yield debts, sovereign and emerging market debts, structured securities, and other securities; arranging private placements, as well as other capital raising activities; and the provision of financial advisory services on business transactions comprising mergers and acquisitions, divestitures, spin-offs, capital structuring, corporate defense activities, leveraged buyouts, and risk solutions. The company was formerly known as The Nomura Securities Co., Ltd. and changed its name to Nomura Holdings, Inc. in October 2001. Nomura Holdings, Inc. was incorporated in 1925 and is headquartered in Tokyo, Japan.
About Rand Capital
Rand Capital Corporation is a business development company specializing in subordinated debt with warrants or preferred equity and venture capital investments. Within private equity, the firm specializing in capital growth and lower middle market investments. Within venture capital, it specializing in early to late-stage private businesses. It does not prefer to invest in real estate sector. It prefers to invest in software, professional services, manufacturing, consumer, healthcare, automotive and public d stocks. It prefers to invest in East or Midwest U.S. operations sectors. It typically invests between $0.75 million and $5 million with initial target size of $1.5 million. It seeks to invest in companies having more than $2 million in revenue or having excess of $1.5 million and up to $5 million in EBITDA. It prefers to be a minority stake and seeks to take a Board seat in its portfolio companies. It typically holds its investments for a period up to five years.
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