Head to Head Analysis: Affiliated Managers Group (AMG) versus Gamco Investors (GBL)

Affiliated Managers Group (NYSE: AMG) and Gamco Investors (NYSE:GBL) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitabiliy and dividends.

Insider & Institutional Ownership

94.9% of Affiliated Managers Group shares are owned by institutional investors. Comparatively, 15.7% of Gamco Investors shares are owned by institutional investors. 2.0% of Affiliated Managers Group shares are owned by insiders. Comparatively, 79.0% of Gamco Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Affiliated Managers Group and Gamco Investors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Affiliated Managers Group 0 2 5 0 2.71
Gamco Investors 0 0 0 0 N/A

Affiliated Managers Group currently has a consensus price target of $188.00, suggesting a potential upside of 16.57%. Given Affiliated Managers Group’s higher possible upside, analysts plainly believe Affiliated Managers Group is more favorable than Gamco Investors.

Dividends

Affiliated Managers Group pays an annual dividend of $0.80 per share and has a dividend yield of 0.5%. Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Affiliated Managers Group pays out 9.1% of its earnings in the form of a dividend. Gamco Investors pays out 2.1% 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. Gamco Investors has raised its dividend for 5 consecutive years.

Profitability

This table compares Affiliated Managers Group and Gamco Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Affiliated Managers Group 22.31% 17.53% 8.64%
Gamco Investors 32.42% -46.35% 60.28%

Earnings and Valuation

This table compares Affiliated Managers Group and Gamco Investors’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Affiliated Managers Group $2.19 billion 4.17 $827.30 million $8.77 18.39
Gamco Investors $357.53 million 2.39 $188.67 million $3.85 7.69

Affiliated Managers Group has higher revenue and earnings than Gamco Investors. Gamco Investors is trading at a lower price-to-earnings ratio than Affiliated Managers Group, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Affiliated Managers Group has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500. Comparatively, Gamco Investors has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Summary

Affiliated Managers Group beats Gamco Investors on 11 of the 16 factors compared between the two stocks.

About Affiliated Managers Group

Affiliated Managers Group, Inc. is an asset management company with equity investments in boutique investment management firms. The Company operates in three segments, which represent its principal distribution channels: Institutional, Mutual Fund and High Net Worth. The equity method investments in the Institutional distribution channel are made in relationships with public and private client entities, including foundations, endowments, sovereign wealth funds and retirement plans for corporations and municipalities. The equity method investments in the Mutual Fund distribution channel are made in advisory or sub-advisory relationships with active return-oriented mutual funds, Undertakings for Collective Investment in Transferable Securities and other retail products. The equity method investments in the High Net Worth distribution channel are made in relationships with high net worth and ultra-high net worth individuals, families, trusts, foundations, endowments and retirement plans.

About Gamco Investors

GAMCO Investors, Inc. is a holding company. The Company is a provider of investment advisory services to open and closed-end funds, institutional and private wealth management investors principally in the United States. The Company operates through the investment advisory and asset management business segment. It manages assets on a discretionary basis and invests in securities through various investment styles. Its assets under management are organized into three groups: Institutional and Private Wealth Management; Open and Closed-End Funds, and the GAMCO International SICAV (SICAV). The Company provides advisory services to a range of investors, including corporate retirement plans, foundations, endowments and private wealth clients, and also serves as sub-advisor to third-party investment funds, including registered investment companies. As of December 31, 2016, it had provided advisory services to 21 open-end funds, 15 closed-end funds and one exchange traded managed fund.

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