Institutional stockbroker and corporate adviser Numis (LSE: NUM) has released a solid trading update. It provides guidance on the outlook for the company in an uncertain investment world. Furthermore, it gives clues as to whether it will outperform financial services peer Barclays (LSE: BARC).

Numis’ revenue from its core activities has increased by 14% versus the prior year. This is a record level for the company and is comfortably above £100m for the first time in its history. This was despite activity in the UK equity market being impacted by the uncertainty brought about by Brexit. Numis completed 19 equity raises including 3 IPOs during its second half. This brings its total number of equity deals to 46 for the year, raising just under £1.9bn in the process.

The second half performance of Numis shows that it offers at least some resilience to challenging market conditions. Its corporate activity was relatively high and saw the completion of 26 pure advisory mandates. Combined revenues from equity issuance and advisory activities grew by an impressive 15%, which surpasses the record levels achieved last year.

Looking ahead, Numis is forecast to increase its bottom line by just 4% in the new financial year. While this is a relatively slow rate of growth, Numis trades on a low rating which indicates that it has a wide margin of safety. For example, its price-to-earnings (P/E) ratio is just 9.2. This indicates that there is considerable upward rerating potential. Furthermore, it means that even if Numis’ financial performance comes under pressure due to uncertainty surrounding Brexit, its share price may have limited downside.

Of course, the financial services sector offers good value at the present time as a result of the challenging outlook it faces. For example, Barclays trades on a forward P/E ratio of 9.5, which indicates that the risk from its new strategy implementation and an uncertain global economic outlook are priced in.

While Barclays has a slightly higher valuation than Numis, it offers greater diversity and more financial firepower. Barclays is a global business which is less dependent upon the UK for its revenue than is the case for Numis. Brexit may not have had a tangible effect on the UK economy as yet, but once the negotiation period begins there is the potential for economic difficulties which would be likely to impact to a greater extent on Numis than Barclays.

Of course, Numis has a higher yield than Barclays. It yields 5.4% from a dividend which is covered twice by profit. Meanwhile, Barclays is due to cut its dividend as it favours holding a greater proportion of capital in order to boost its financial strength yet further. As such, it yields just 1.8% but with dividends being covered 5.8 times by profit, there is scope for a rapid rise in Barclays’ shareholder payouts over the medium term.

Although both Numis and Barclays have significant appeal given their low valuations and bright long-term futures, the greater diversity and lower risk of Barclays mean that its risk/reward profile is more appealing. Numis remains a superior income play at the present time in my opinion, but Barclays could catch it up in this respect over the long run.

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Peter Stephens owns shares of Barclays and Numis. The Motley Fool UK has recommended Barclays. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.