Stifel And Piper Jaffray Tell A 'Tale Of Two Companies,' Analysts Say

In a recent report, analysts at MKM partners compared Stifel Financial Corp SF and Piper Jaffray Companies PJC and the different paths the two companies have taken in the past decade.

Analysts paint a picture of "a tale of two companies."

Stifel-Aggressive Growth Story

After beginning the last decade as a small regional brokerage firm, Stifel has aggressively grown its operations and made 12 targeted acquisitions along the way.

Analysts now describe Stifel as a diversified full-service securities firm with a nice balance of private and institutional clients.

Stifel is now eight times larger than it was a decade ago, and analysts believe that the growth has been relatively low-risk by industry standards. Stifel grew revenue by 14 percent in 2014, and institutional trading was up 7 percent for the year.

Related Link: Stifel, Sterne Agee Announce Sale of Sterne Agee's Institutional Equities Business to CRT Capital; Financial Terms Not Disclosed

Analysts praise Stifel's growth record and see strong management continuing to drive earnings growth in the future.

MKM has a Buy rating on Stifel and a $67 target for the stock.

Piper Jaffray- Shrinking And Specializing

A decade ago, Piper Jaffray was also a small regional firm with modest institutional equities activity. While Stifel has been buying up targets to expand its business, Piper has been shedding non-core aspects of its business.

In 2006, the company sold its regional retail brokerage franchise to UBS Group AG UBS. The move was seen as a positive in the market, as Piper's share price jumped when the deal was announced.

Ten years later, Piper Jaffray is now focused on its core competencies, and the company is actually smaller in size now than it was a decade ago.

Analysts see little growth ahead and minimal upside to the stock from current levels.

MKM has a Neutral rating on Piper Jaffray and a $60 target for the stock.