Head to Head Comparison: Invesco (NYSE:IVZ) versus Sprott (NYSE:SII)

Invesco (NYSE:IVZ) and Sprott (NYSE:SII) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Profitability

This table compares Invesco and Sprott’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Invesco	-6.11%	11.34%	4.49%
Sprott	21.99%	23.54%	17.48%

Dividends

Invesco pays an annual dividend of $0.84 per share and has a dividend yield of 3.0%. Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.1%. Invesco pays out -57.1% of its earnings in the form of a dividend. Sprott pays out 48.9% 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. Invesco has raised its dividend for 5 consecutive years and Sprott has raised its dividend for 1 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

66.1% of Invesco shares are owned by institutional investors. Comparatively, 28.3% of Sprott shares are owned by institutional investors. 1.4% of Invesco shares are owned by insiders. Comparatively, 18.3% of Sprott shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Invesco has a beta of 1.6, indicating that its share price is 60% more volatile than the S&P 500. Comparatively, Sprott has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares Invesco and Sprott”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invesco	$6.38 billion	1.92	-$281.70 million	($1.47)	-18.75
Sprott	$285.08 million	12.74	$67.35 million	$3.27	43.10

Sprott has lower revenue, but higher earnings than Invesco. Invesco is trading at a lower price-to-earnings ratio than Sprott, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Invesco and Sprott, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Invesco	0	11	4	0	2.27
Sprott	0	1	2	0	2.67

Invesco presently has a consensus price target of $27.29, indicating a potential downside of 1.02%. Sprott has a consensus price target of $230.00, indicating a potential upside of 63.21%. Given Sprott’s stronger consensus rating and higher possible upside, analysts clearly believe Sprott is more favorable than Invesco.

Summary

Sprott beats Invesco on 10 of the 17 factors compared between the two stocks.

About Invesco

Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

About Sprott

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.