April 2016 Global Equity Research Hugo J. Warns, III, CFA, Director of Research Keith Gay, Associate Director of Research Stifel does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. All relevant disclosures and certifications appear on pages 27-30 of this report.
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April 2016
Global Equity Research
Hugo J. Warns, III, CFA, Director of Research
Keith Gay, Associate Director of Research
Stifel does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
All relevant disclosures and certifications appear on pages 27-30 of this report.
Stifel Overview
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Stifel Overview
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(1) As of 4/5/16 (2) As of 12/31/15 (3) As of 12/31/15
Global Wealth Management (GWM)
Institutional Group (IG)
Independent Research Institutional Equity & Fixed Income
Brokerage Equity & Fixed Income Capital Raising M&A Advisory/Restructuring Largest U.S. equity research platform Broad product portfolio & industry
expertise $976 million net revenues(2)
Private Client Stifel Bank & Trust
Margin & Securities-based Lending Asset Management National presence with over 2,800
Financial Advisors in 360 branches $1.4 billion net revenues(2) $234 billion in total client assets(3)
Stifel Financial (NYSE: SF)
Financial services firm demonstrating growth, scale and stability
$2.0 billion market capitalization(1)
2015 represented Stifel’s 20th year of consecutive record net revenues Balanced business model Top performing financial stock over the past ten years
• Second Largest provider of global small cap coverage1
• Fourth Largest provider of global financial coverage1
• Fifth Largest provider of global real estate coverage1
• 14th largest provider of global coverage1
• 1,742 global stocks under coverage1, 128 analysts across 12 sectors 1
• Ranked in StarMine top 10 for 12 consecutive years
• Largest global provider of Banks • #1 U.S. provider of Financial Services coverage • #4 global provider of Financial Services coverage • 585 stocks, 46 analysts • IIA2 #1 in Consumer Finance • 2015 Thomson Reuters Starmine Top 3 in:
• 9th largest provider of U.S. coverage • #2 provider of U.S. Small Cap coverage • 1,157 stocks, 82 analysts* • Ranked #1 in 2015 EXTEL UK Small & Mid Cap: Real Estate • 2015 Thomson Reuters Starmine Top 3 in:
− Air Freight & Logistics − Building Products − Business & Consumer Services − Hotels & Leisure − IT Services − Real Estate − Tobacco
Global Research Footprint
7 Source: Company data as of 3/31/16; (1) Includes KBW; (2) 2014 Institutional Investor Award; *Includes UK.
Large Cap: > $5bn Mid Cap: $1bn - $5bn Small Cap: <$1bn
Median: $14.3bn
Median: $2.3bn
Median: $347mn
Diversified Global Coverage
9 Source: Company data; as of 3/31/16
Balanced Market Cap Sector
Analysts Coverage %
Financial Institutions 46 585 34%
Technology 14 221 13%
Consumer & Retail 14 216 12%
Healthcare 12 156 9%
Real Estate 5 109 6%
Diversified Industrials 8 107 6%
Energy & Power 6 103 6%
Transportation 5 87 5%
Internet, Media & Telecom 5 63 4%
Business Services 3 46 3%
Metals & Mining 4 31 2%
Aerospace, Defense & Gov't Svcs. 1 18 1%
Market Strategy 5 0 0%
Total 128 1,742 100%
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Notes: •U.S. only stocks •Excludes ADRs •Large Cap: > $5bn •Mid Cap: $1bn- $5bn •Small Cap: < $1bn •Source: StarMine through 3/31/16; Overall coverage includes only companies with a rating & domiciled in the U.S.
Keybanc Capital Markets 541 Cowen And Company 201 Robert W. Baird & Co., Inc. 143
Macquarie Research Equities 531 Macquarie Research Equities 188 Barclays 143
Morningstar, Inc. 517 BB&T Capital Markets 153 Canaccord Genuity 139
Stephens Inc. 499 BMO Capital Markets 149 Morgan Stanley 138
BMO Capital Markets 490 Evercore Isi 148
Overall Region Coverage Mid Cap Region Coverage Small Cap Region Coverage
No. 1 Sector Rankings: Out of 64 sectors Stifel/KBW had 5 No. 1 rankings Niamh Alexander, No. 1 in Stock Picking, Capital Markets John Cahill, No. 1 in Stock Picking, Real Estate Jade Rahmani, No. 1 in Stock Picking, Household Durables (Two-time award winner) Michael Widner, No. 1 in Earnings Estimate Accuracy, Real Estate Investment Trusts Simon Yarmak, No. 1 in Earnings Estimate Accuracy, Hotels & Leisure (Two-time award winner)
Top 3 Sector Rankings John Baugh, No. 2 in Stock Picking, Building Products (Three-time award winner) Hector Forsythe, No. 2 in Stock Picking, Business & Consumer Services (Two-time award winner) Bose George, No. 2 in Earnings Estimate Accuracy, Real Estate Investment Trusts (Four-time award winner) David Grossman, No. 2 in Stock Picking, IT Services John Larkin, No. 2 in Stock Picking, Air Freight & Logistics (Six-time award winner) John Baugh, No. 3 in Earnings Estimate Accuracy, Household Durables Christopher Brendler, No. 3 in Earnings Estimate Accuracy, IT Services (Two-time award winner) Collyn Gilbert, No. 3 in Stock Picking, Banks (Three-time award winner) Christopher Growe, No. 3 in Stock Picking, Tobacco (Three-time award winner)
#7 out of 167 qualifying U.S. Firms, with a combined 12 awards* 12th consecutive year in the top 10
Source: StarMine 2015 For more information on the Thomson Reuters StarMine Analyst Awards, see www.stifel.com/research *Does not include UK or Europe
Bose George #1 ranked, Consumer & Specialty Finance (2-time winner) Mark Swartzberg, #2 ranked, Beverages (4-time winner) Dan Bernstein, #2 ranked, Health Care Josh Barber, #3 ranked, Real Estate* Jeff Schuman, #3 ranked, Insurance-Life (3-time winner)
Institutional Investor’s 2014 annual “All America Research Team” Sanjay Sakhrani, #1 ranked, Consumer Finance Matt Sheerin, Runner Up, Technology Supply Chain
Greenwich Associates' 2012 “The Top U.S. Analysts” Jefferson Harralson, #2 ranked, Banks/Regional Sanjay Sakhrani, #2 ranked, Finance/Consumer & Specialty
Award Winning Research
Wall Street Journal’s 2013 “Best on the Street” Analyst Survey
Additional Awards
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Ranked 4th with 5 Awards
Source: WSJ, IIA, Greenwich; * No longer with the firm.
13 Source: WSJ - 2004-2013; StarMine Survey Awards 2004-2015; includes Legg Mason, Ryan Beck, Thomas Weisel Partners and KBW
285 Professionals in Equity Research: 128 analysts, 112 associates
Significant investment in Research staff and coverage since 2004
Unparalleled Investment & Commitment to Research
Source: Company data; as of 3/31/16
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Source: Company Data as of 12/31/15; US only
*Excludes Terminations, Retirements, KBW
Platform stability drives performance
Internally develop, train, and retain talent
• Over 50% of our analysts are home-grown
• Over 56% of the analysts have received external recognition
• Over 35% of the analysts have the CFA designation
― 46% of associates with CFA or in process
• Over 60% have advanced degrees
• Average analyst has over 11 years of experience
• Very low analyst turnover
― 95% retention rate over past 5 years *
― Solid retention drives continuity, experience, and better research
How Do We Do It? Expertise & Experience
Equity Research – Regional Highlights
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63 analysts covering 982 stocks, 9th largest coverage overall
Second largest provider of U.S. small cap equity coverage
Top 10 provider of U.S. equity coverage in:
17 Source: StarMine , US domicile only, 3/31/16; Large Cap: > $5bn; Mid Cap: $1bn - $5bn; Small Cap: <$1bn
Transportation Technology
Stifel Research Highlights – U.S. Coverage
Market leader following significant investments over the past 10 years
Real Estate
Diversified Industrials
Consumer & Retail Healthcare Internet & Media
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Ranked in StarMine top 10 for the past 12 years
Ranked 5th overall in total StarMine awards since 2004*
Award Winning Research - Stifel
Source: StarMine For more information on the Thomson Reuters StarMine Analyst Awards, see www.stifel.com/research *Includes Legg Mason Capital Markets, Ryan Beck and Thomas Weisel Partners; 2014 and 2015 includes KBW
Thomson Reuters StarMine World’s Top Analysts Survey recognizes analysts who have turned in exemplary performances either as earnings estimators or stock pickers during the year.
P & C insurance actuary – Zurich Federal Bank Regulator – Office of the Comptroller M&A Advisory – Silverton Bank Strategy & Technology Consultant – Wells Fargo Supervisory Senior Auditor – KPMG Economist – Bank of America Actuary – CIGNA Strategic Investment Group – Instinet Legislative assistant to 2 U. S. House of Representatives
Insurance
Financial
Insurance
Financial
Financial
Financial
Financial
Financial
Industry Expertise - KBW
Research thought leaders
Washington
Policy
2016 Conferences
Seniors Housing & Healthcare Real Estate, Jan 25-26, Phoenix
We, Hugo J. Warns and Keith Gay, certify that the views expressed in this research report accurately reflect my personal views about the subject securities or issuers; and We, Hugo J. Warns and Keith Gay, certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. Our European Policy for Managing Research Conflicts of Interest is available at www.stifel.com The equity research analyst(s) responsible for the preparation of this report receive(s) compensation based on various factors, including Stifel’s overall revenue, which includes investment banking revenue. Our investment rating system is three tiered, defined as follows: BUY – We expect a total return of greater than 10% over the next 12 months with total return equal to the percentage price change plus dividend yield. HOLD – We expect a total return between -5% and 10% over the next 12 months with total return equal to the percentage price change plus dividend yield. SELL – We expect a total return below -5% over the next 12 months with total return equal to the percentage price change plus dividend yield. Occasionally, we use the ancillary rating of SUSPENDED (SU) to indicate a long-term suspension in rating and/or target price, and/or coverage due to applicable regulations or Stifel policies. SUSPENDED indicates the analyst is unable to determine a “reasonable basis” for rating/target price or estimates due to lack of publicly available information or the inability to quantify the publicly available information provided by the company and it is unknown when the outlook will be clarified. SUSPENDED may also be used when an analyst has left the firm. Of the securities we rate, 50% are rated Buy, 40% are rated Hold, and 3% are rated Sell and 7% are rated Suspended. Within the last 12 months, Stifel or an affiliate has provided investment banking services for 16%, 7%, 7% and 7% of the companies whose shares are rated Buy, Hold, Sell and Suspended respectively.
Please visit the Research Page at www.stifel.com for the current research disclosures and respective target price methodology applicable to the companies mentioned in this publication that are within Stifel's coverage universe. For a discussion of risks to target price please see our stand-alone company reports and notes for all Buy-rated and Sell-rated stocks. The information contained herein has been prepared from sources believed to be reliable but is not guaranteed by us and is not a complete summary or statement of all available data, nor is it considered an offer to buy or sell any securities referred to herein. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of Stifel, or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed within. Past performance should not and cannot be viewed as an indicator of future performance. As a multi-disciplined financial services firm, Stifel regularly seeks investment banking assignments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial advisor in a merger or acquisition, or serving as a placement agent in private transactions. Affiliate Disclosures “Stifel”, includes Stifel Nicolaus & Company (“SNC”), a US broker-dealer registered with the United States Securities and Exchange Commission and the Financial Industry National Regulatory Authority and Stifel Nicolaus Europe Limited (“SNEL”), which is authorized and regulated by the Financial Conduct Authority (“FCA”), (FRN 190412) and is a member of the London Stock Exchange. Registration of non-US Analysts: Any non-US research analyst employed by SNEL contributing to this report is not registered/qualified as a research analyst with FINRA and is not an associated person of the US broker-dealer and therefore many not be subject to FINRA Rule 2241 or NYSE Rule 472 restrictions on communications with a subject company, public appearances, and trading securities held by a research analyst account.
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Additional Disclosures
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Additional Disclosures
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