Comparing The Goldman Sachs Group (NYSE:GS) and Wells Fargo & Company (NYSE:WFC)

The Goldman Sachs Group (NYSE:GS) and Wells Fargo & Company (NYSE:WFC) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Volatility & Risk

The Goldman Sachs Group has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500. Comparatively, Wells Fargo & Company has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500.

Profitability

This table compares The Goldman Sachs Group and Wells Fargo & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Goldman Sachs Group	12.37%	14.32%	0.89%
Wells Fargo & Company	16.82%	12.29%	1.04%

Analyst Ratings

This is a breakdown of current recommendations for The Goldman Sachs Group and Wells Fargo & Company, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Goldman Sachs Group	1	11	5	1	2.33
Wells Fargo & Company	0	7	11	0	2.61

The Goldman Sachs Group currently has a consensus target price of $660.00, suggesting a potential downside of 11.98%. Wells Fargo & Company has a consensus target price of $81.58, suggesting a potential downside of 1.21%. Given Wells Fargo & Company’s stronger consensus rating and higher possible upside, analysts plainly believe Wells Fargo & Company is more favorable than The Goldman Sachs Group.

Valuation and Earnings

This table compares The Goldman Sachs Group and Wells Fargo & Company”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Goldman Sachs Group	$126.85 billion	1.79	$14.28 billion	$45.38	16.52
Wells Fargo & Company	$125.40 billion	2.11	$19.72 billion	$5.84	14.14

Wells Fargo & Company has lower revenue, but higher earnings than The Goldman Sachs Group. Wells Fargo & Company is trading at a lower price-to-earnings ratio than The Goldman Sachs Group, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

71.2% of The Goldman Sachs Group shares are owned by institutional investors. Comparatively, 75.9% of Wells Fargo & Company shares are owned by institutional investors. 0.6% of The Goldman Sachs Group shares are owned by insiders. Comparatively, 0.1% of Wells Fargo & Company shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

The Goldman Sachs Group pays an annual dividend of $12.00 per share and has a dividend yield of 1.6%. Wells Fargo & Company pays an annual dividend of $1.80 per share and has a dividend yield of 2.2%. The Goldman Sachs Group pays out 26.4% of its earnings in the form of a dividend. Wells Fargo & Company pays out 30.8% 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. The Goldman Sachs Group has raised its dividend for 13 consecutive years and Wells Fargo & Company has raised its dividend for 4 consecutive years.

About The Goldman Sachs Group

The Goldman Sachs Group, Inc., a financial institution, provides a range of financial services for corporations, financial institutions, governments, and individuals worldwide. It operates through Global Banking & Markets, Asset & Wealth Management, and Platform Solutions segments. The Global Banking & Markets segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, and spin-offs; and relationship lending, and acquisition financing, as well as secured lending, through structured credit and asset-backed lending and involved in financing under securities to resale agreements. This segment also offers client execution activities for cash and derivative instruments; credit and interest rate products; and provision of mortgages, currencies, commodities, and equities related products, as well as underwriting services. The Asset & Wealth Management segment manages assets across various classes, including equity, fixed income, hedge funds, credit funds, private equity, real estate, currencies, and commodities; and provides customized investment advisory solutions, wealth advisory services, personalized financial planning, and private banking services, as well as invests in corporate equity, credit, real estate, and infrastructure assets. The Platform Solutions segment offers credit cards and point-of-sale financing for purchase of goods or services. This segment also provides cash management services, such as deposit-taking and payment solutions for corporate and institutional clients. The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in New York, New York.

About Wells Fargo & Company

Wells Fargo & Co. is a diversified and community-based financial services company, which engages in the provision of banking, insurance, investments, mortgage, and consumer and commercial finance products and services. It operates through the following segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. The Consumer Banking and Lending segment offers consumer and small business banking, home lending, credit cards, auto, and personal lending. The Commercial Banking segment provides banking and credit products across industry sectors and municipalities, secured lending and lease products, and treasury management. The Corporate and Investment Banking segment is composed of corporate banking, investment banking, treasury management, commercial real estate lending and servicing, and equity and fixed income solutions, as well as sales, trading, and research capabilities. The Wealth and Investment Management segment refers to personalized wealth management, brokerage, financial planning, lending, private banking, trust, and fiduciary products and services. The company was founded by Henry Wells and William G. Fargo on March 18, 1852 and is headquartered in San Francisco, CA.