Oaktree Capital Group (NYSE: OAK) and Gamco Investors (NYSE:GBL) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.
Insider & Institutional Ownership
21.8% of Oaktree Capital Group shares are held by institutional investors. Comparatively, 25.4% of Gamco Investors shares are held by institutional investors. 79.0% of Gamco Investors shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of recent recommendations for Oaktree Capital Group and Gamco Investors, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Oaktree Capital Group||0||5||1||0||2.17|
Oaktree Capital Group currently has a consensus price target of $49.50, suggesting a potential upside of 4.32%. Given Oaktree Capital Group’s higher probable upside, equities research analysts clearly believe Oaktree Capital Group is more favorable than Gamco Investors.
Oaktree Capital Group pays an annual dividend of $5.24 per share and has a dividend yield of 11.0%. Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Oaktree Capital Group pays out 114.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Gamco Investors pays out 2.2% of its earnings in the form of a dividend. Gamco Investors has increased its dividend for 5 consecutive years.
Risk and Volatility
Oaktree Capital Group has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Gamco Investors has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500.
Earnings & Valuation
This table compares Oaktree Capital Group and Gamco Investors’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Oaktree Capital Group||$1.51 billion||2.02||$497.59 million||$4.57||10.38|
|Gamco Investors||$361.19 million||2.41||$181.57 million||$3.68||8.20|
Oaktree Capital Group has higher revenue and earnings than Gamco Investors. Gamco Investors is trading at a lower price-to-earnings ratio than Oaktree Capital Group, indicating that it is currently the more affordable of the two stocks.
This table compares Oaktree Capital Group and Gamco Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Oaktree Capital Group||19.17%||20.11%||4.95%|
Gamco Investors beats Oaktree Capital Group on 9 of the 16 factors compared between the two stocks.
About Oaktree Capital Group
Oaktree Capital Group, LLC (Oaktree) is an investment manager specializing in alternative investments. The Company operates through investment management segment, which consists of the investment management services that the Company provides to its clients. The Company manages investments in a range of strategies within approximately six asset classes, which include corporate debt, convertible securities, distressed debt, control investing, real estate and listed equities. The Funds managed by Oaktree include commingled funds, separate accounts and collateralized loan obligation vehicles (CLOs). The commingled funds include open-end and closed-end limited partnerships in which it makes an investment and for which it serves as the general partner. CLOs are structured finance vehicles in which the Company typically makes an investment and for which it serves as collateral manager. Its clientele includes the United States pension plans and corporations and/or their pension funds.
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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