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Stifel Financial Corp SF

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SPACs Are at Worst Neutral to Investment Banking Revenue and Could Be Meaningfully Positive

Michael Wong, CFA, CPA Sector Director

Analyst Note

| Michael Wong, CFA, CPA |

We believe that special-purpose acquisition companies, or SPACs, are a net positive to industrywide investment banking revenue. We estimate that the three SPAC-related investment banking fees—initial SPAC underwriting, private investment in public equity placement fees, and acquisition advisory fees—for a relatively large SPAC worth $1 billion can be as much as 50% higher than the traditional IPO underwriting fee for bringing a private company public. For an average SPAC of around $300 million, we estimate investment banks will earn about as much SPAC-related revenue as they would from a traditional initial public offering process. In aggregate, we estimate that there's $17 billion-$20 billion of investment banking revenue related to the $200 billion of SPAC capital raised over the previous two years.

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Company Profile

Business Description

Stifel Financial is a middle-market-focused investment bank that produces more than 90% of its revenue in the United States. Approximately 60% of the company's net revenue is derived from its global wealth management division, which supports over 2,000 financial advisors, with the remainder coming from its institutional securities business. Stifel has a history of being an active acquirer of other financial service firms.

501 North Broadway
St. Louis, MO, 63102-2188
T +1 314 342-2000
Sector Financial Services
Industry Capital Markets
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 8,500