Comparing T. Rowe Price Group (TROW) & Virtus Investment Partners (VRTS)

T. Rowe Price Group (NASDAQ: TROW) and Virtus Investment Partners (NASDAQ:VRTS) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, analyst recommendations, dividends, valuation, risk, institutional ownership and earnings.

Valuation and Earnings

This table compares T. Rowe Price Group and Virtus Investment Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
T. Rowe Price Group $4.22 billion 5.90 $1.22 billion $6.10 16.84
Virtus Investment Partners $322.55 million 2.61 $48.50 million $5.36 21.90

T. Rowe Price Group has higher revenue and earnings than Virtus Investment Partners. T. Rowe Price Group is trading at a lower price-to-earnings ratio than Virtus Investment Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for T. Rowe Price Group and Virtus Investment Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
T. Rowe Price Group 2 5 2 0 2.00
Virtus Investment Partners 0 5 0 0 2.00

T. Rowe Price Group currently has a consensus price target of $91.00, indicating a potential downside of 11.44%. Virtus Investment Partners has a consensus price target of $130.00, indicating a potential upside of 10.73%. Given Virtus Investment Partners’ higher probable upside, analysts plainly believe Virtus Investment Partners is more favorable than T. Rowe Price Group.

Risk & Volatility

T. Rowe Price Group has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, Virtus Investment Partners has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500.

Profitability

This table compares T. Rowe Price Group and Virtus Investment Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
T. Rowe Price Group 33.10% 24.76% 19.41%
Virtus Investment Partners 11.64% 12.75% 3.21%

Dividends

T. Rowe Price Group pays an annual dividend of $2.28 per share and has a dividend yield of 2.2%. Virtus Investment Partners pays an annual dividend of $1.80 per share and has a dividend yield of 1.5%. T. Rowe Price Group pays out 37.4% of its earnings in the form of a dividend. Virtus Investment Partners pays out 33.6% 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. T. Rowe Price Group has raised its dividend for 30 consecutive years. T. Rowe Price Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

72.2% of T. Rowe Price Group shares are held by institutional investors. Comparatively, 95.8% of Virtus Investment Partners shares are held by institutional investors. 3.6% of T. Rowe Price Group shares are held by insiders. Comparatively, 4.0% of Virtus Investment Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

T. Rowe Price Group beats Virtus Investment Partners on 11 of the 16 factors compared between the two stocks.

T. Rowe Price Group Company Profile

T. Rowe Price Group, Inc. is a financial services holding company. The Company provides global investment management services through its subsidiaries to investors across the world. The Company provides an array of Company sponsored the United States mutual funds, other sponsored pooled investment vehicles, sub advisory services, separate account management, recordkeeping, and related services to individuals, advisors, institutions, financial intermediaries and retirement plan sponsors. The Company distributes its products in countries located within three geographical regions: North America, Europe Middle East and Africa (EMEA), and Asia Pacific (APAC). It also offers specialized advisory services, including management of stable value investment contracts and a distribution management service for the disposition of equity securities its clients receive from third-party venture capital investment pools. As of December 31, 2016, it serviced clients in 45 countries across the world.

Virtus Investment Partners Company Profile

Virtus Investment Partners, Inc. (Virtus) is a provider of investment management and related services to individuals and institutions. The Company provides its products in various forms and through multiple distribution channels. Its retail products include open-end mutual funds, closed-end funds, exchange traded funds, variable insurance funds, undertakings for collective investments in transferable securities (UCITS) and separately managed accounts. Its open-end mutual funds are distributed through intermediaries. Its closed-end funds trade on the New York Stock Exchange. Its variable insurance funds are available as investment options in variable annuities and life insurance products distributed by life insurance companies. Separately managed accounts consists of intermediary programs, sponsored and distributed by unaffiliated brokerage firms, and private client accounts, which are offered to the high net-worth clients of its affiliated managers.

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