Comparing Piper Sandler Companies (NYSE:PIPR) and Diamond Hill Investment Group (NASDAQ:DHIL)

Diamond Hill Investment Group (NASDAQ:DHIL) and Piper Sandler Companies (NYSE:PIPR) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent ratings for Diamond Hill Investment Group and Piper Sandler Companies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diamond Hill Investment Group	0	1	0	0	2.00
Piper Sandler Companies	0	4	1	0	2.20

Piper Sandler Companies has a consensus price target of $312.50, suggesting a potential downside of 8.56%. Given Piper Sandler Companies’ stronger consensus rating and higher possible upside, analysts plainly believe Piper Sandler Companies is more favorable than Diamond Hill Investment Group.

Earnings & Valuation

This table compares Diamond Hill Investment Group and Piper Sandler Companies”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diamond Hill Investment Group	$151.10 million	2.58	$43.18 million	$17.58	8.11
Piper Sandler Companies	$1.53 billion	3.96	$181.11 million	$11.85	28.84

Piper Sandler Companies has higher revenue and earnings than Diamond Hill Investment Group. Diamond Hill Investment Group is trading at a lower price-to-earnings ratio than Piper Sandler Companies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Diamond Hill Investment Group and Piper Sandler Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diamond Hill Investment Group	31.71%	21.38%	14.72%
Piper Sandler Companies	13.18%	18.67%	12.85%

Risk and Volatility

Diamond Hill Investment Group has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Piper Sandler Companies has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500.

Institutional and Insider Ownership

65.5% of Diamond Hill Investment Group shares are held by institutional investors. Comparatively, 72.8% of Piper Sandler Companies shares are held by institutional investors. 4.6% of Diamond Hill Investment Group shares are held by company insiders. Comparatively, 2.7% of Piper Sandler Companies 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.

Dividends

Diamond Hill Investment Group pays an annual dividend of $6.00 per share and has a dividend yield of 4.2%. Piper Sandler Companies pays an annual dividend of $2.80 per share and has a dividend yield of 0.8%. Diamond Hill Investment Group pays out 34.1% of its earnings in the form of a dividend. Piper Sandler Companies pays out 23.6% 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. Piper Sandler Companies has increased its dividend for 1 consecutive years.

Summary

Piper Sandler Companies beats Diamond Hill Investment Group on 11 of the 17 factors compared between the two stocks.

About Diamond Hill Investment Group

Diamond Hill Investment Group, Inc., through its subsidiary, Diamond Hill Capital Management, Inc., provides investment advisory and fund administration services in the United States. It offers investment advisory and related services to clients through pooled vehicles, such as private fund; separately managed accounts; collective investment trusts; and other pooled vehicles, including sub-advised funds and model delivery programs. The company also provides fund administration services comprising portfolio and regulatory compliance, treasury and financial oversight, and general business management and governance of the funds, as well as oversight of back-office service providers, which include the custodian, fund accountant, and transfer agent. Diamond Hill Investment Group, Inc. was incorporated in 1990 and is based in Columbus, Ohio.

About Piper Sandler Companies

Piper Sandler Companies operates as an investment bank and institutional securities firm that serves corporations, private equity groups, public entities, non-profit entities, and institutional investors in the United States and internationally. It offers investment banking services and institutional sales, trading, and research services for various equity and fixed income products; advisory services, such as mergers and acquisitions, equity and debt private placements, and debt and restructuring advisory; raises capital through equity and debt financings; underwrites municipal issuances; and municipal financial advisory and loan placement services, as well as various over-the-counter derivative products. It also provides public finance investment banking services that focus on state and local governments, and cultural and social service non-profit entities, as well as the education, healthcare, hospitality, senior living, housing, and transportation sectors. In addition, the company offers equity and fixed income advisory and trade execution services for institutional investors, corporations, and government and non-profit entities. Further, it is involved in the alternative asset management funds merchant banking and healthcare to invest firm capital and to manage capital from outside investors. The company was formerly known as Piper Jaffray Companies and changed its name to Piper Sandler Companies in January 2020. Piper Sandler Companies was founded in 1895 and is headquartered in Minneapolis, Minnesota.