Splitting the Goldman Sachs Difference

Goldman Sachs (GS Quote) isn't considering a breakup anytime soon, as far as we know.

But given all the recent agitating for a Citigroup (C Quote) split, the question of why Goldman shares trade the way they do is an interesting proposition.

In reputation and financial clout, the institution represents Wall Street's high water mark. Goldman's venerable investment banking franchise reported record net revenue this past quarter of $1.72 billion and ranks No. 1 on the merger and acquisition league tables, according to research firm Thomson Financial.

That's not all. Like many financial white-shoes, Goldman has had to become so much more than a simple M&A/investment banking shop. Its commodities trading business has benefited from the volatility in prices tied to energy and natural resources. Its fixed-income platform recently racked up quarterly revenue of $4.6 billion.

Goldman also is raising some $20 billion in private equity firepower. Those numbers rival heavy hitters such as the Blackstone Group, Carlyle Group, TPG and Kohlberg Kravis Roberts, many of which have also been Goldman clients.

Yet for all of Goldman's dominance, the stock is hardly loved by Wall Street. Richard Bove, analyst at Punk Ziegel, notes that Goldman trades at a steep discount to many lesser rivals -- in part because diversified financial giants, like Goldman and Citi, don't tend to get premium multiples.