Medley Management (NYSE: MDLY) and Ares Management (NYSE:ARES) are both investment management companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, dividends, valuation, earnings, profitability, risk and institutional ownership.
Volatility & Risk
Medley Management has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500. Comparatively, Ares Management has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.
Valuation & Earnings
This table compares Medley Management and Ares Management’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Medley Management||$76.03 million||0.48||$990,000.00||$0.24||27.92|
|Ares Management||$1.20 billion||1.31||$111.80 million||$0.56||34.02|
Ares Management has higher revenue and earnings than Medley Management. Medley Management is trading at a lower price-to-earnings ratio than Ares Management, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations for Medley Management and Ares Management, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Medley Management presently has a consensus target price of $9.25, suggesting a potential upside of 38.06%. Ares Management has a consensus target price of $21.33, suggesting a potential upside of 11.99%. Given Medley Management’s higher probable upside, equities research analysts plainly believe Medley Management is more favorable than Ares Management.
This table compares Medley Management and Ares Management’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Medley Management pays an annual dividend of $0.80 per share and has a dividend yield of 11.9%. Ares Management pays an annual dividend of $1.64 per share and has a dividend yield of 8.6%. Medley Management pays out 333.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ares Management pays out 292.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Institutional & Insider Ownership
56.9% of Medley Management shares are owned by institutional investors. Comparatively, 15.6% of Ares Management shares are owned by institutional investors. 5.1% of Medley Management shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Ares Management beats Medley Management on 10 of the 16 factors compared between the two stocks.
Medley Management Company Profile
Medley Management Inc. is an asset management firm offering yield solutions to retail and institutional investors. The Company operates in the investment management segment. It is focused on credit-related investment strategies, primarily originating senior secured loans to private middle market companies in the United States. The Company generally holds these loans to maturity. Its national direct origination franchise provides capital to the middle market in the United States. The Company has over $4.8 billion of assets under management (AUM) in approximately two business development companies (BDCs), Medley Capital Corporation (MCC) and Sierra Income Corporation (SIC), as well as private investment vehicles. It has over $5 billion of AUM. The Company provides capital to over 300 companies across approximately 35 industries in North America. The Company’s long-dated private funds include MOF I, MOF II and MOF III. Its private funds are managed through partnership structures
Ares Management Company Profile
Ares Management, L.P. is an alternative asset manager. The Company offers its investors a range of investment strategies. It operates through three segments: Credit Group, Private Equity Group and Real Estate Group. The Credit Group segment manages credit strategies across the non-investment grade credit universe in the United States and Europe. It offers a range of credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, credit opportunities, structured credit investments and the United States and European direct lending. The Credit Group provides solutions for traditional fixed income investors. The Private Equity Group segment categorizes its investment strategies as corporate private equity, the United States power and energy infrastructure and special situations. The Real Estate Group segment manages public and private equity and debt strategies. The Real Estate Group manages both a value-add strategy and an opportunistic strategy.
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