Morgan Keegan Acquisition Won't Stifle Stifel (SF)
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Rating Summary:
13 Buy, 8 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Stifel Financial Corp. (NYSE: SF) has made some big acquisitions over the last several years, quintupling its revenue with nine acquisitions since 2005.
However, the best may still be yet to come.
According to reports Friday, Stifel could do well with the acquisition of Morgan Keegan from Regions Financial (NYSE: RF). Keegan offers Stifel a solid brokerage operation, fixed-income business, and strong presence in the Southeastern U.S.
One analyst, from Silvant Capital, said Stifel may pay as much as $1 billion in the deal, or six times more than its previous large deal. Another firm believes Keegan may draw as much as $1.5 billion or as little as $750 million.
Last year, Stifel nabbed Thomas Weisel in a $159.1 million stock deal, it's largest acquisition to date.
With 4,400 in 300 offices in the Southeast, the acquisition would provide Stifel with a much needed presence in the region.
Bloomberg also noted the acquisition would bolster Stifel's rather paltry operating margins, which, at just 0.75 percent over the last year, places the bank among the lowest of comparable U.S. investment banks and brokerages. That industry boasts an average of 13 percent.
Stifel might see competition from Wells Fargo (NYSE: WFC) and BB&T (NYSE: BBT), though some question whether or not Wells feels expansion of its wealth-management business is a strategic imperative right now.
However, the best may still be yet to come.
According to reports Friday, Stifel could do well with the acquisition of Morgan Keegan from Regions Financial (NYSE: RF). Keegan offers Stifel a solid brokerage operation, fixed-income business, and strong presence in the Southeastern U.S.
One analyst, from Silvant Capital, said Stifel may pay as much as $1 billion in the deal, or six times more than its previous large deal. Another firm believes Keegan may draw as much as $1.5 billion or as little as $750 million.
Last year, Stifel nabbed Thomas Weisel in a $159.1 million stock deal, it's largest acquisition to date.
With 4,400 in 300 offices in the Southeast, the acquisition would provide Stifel with a much needed presence in the region.
Bloomberg also noted the acquisition would bolster Stifel's rather paltry operating margins, which, at just 0.75 percent over the last year, places the bank among the lowest of comparable U.S. investment banks and brokerages. That industry boasts an average of 13 percent.
Stifel might see competition from Wells Fargo (NYSE: WFC) and BB&T (NYSE: BBT), though some question whether or not Wells feels expansion of its wealth-management business is a strategic imperative right now.
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