OM Asset Management (NYSE: OMAM) and Pzena Investment Management (NYSE:PZN) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.
Earnings & Valuation
This table compares OM Asset Management and Pzena Investment Management’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|OM Asset Management||$663.50 million||2.64||$126.40 million||$0.68||23.47|
|Pzena Investment Management||$108.34 million||6.97||$16.17 million||$0.70||15.73|
OM Asset Management has higher revenue and earnings than Pzena Investment Management. Pzena Investment Management is trading at a lower price-to-earnings ratio than OM Asset Management, indicating that it is currently the more affordable of the two stocks.
This table compares OM Asset Management and Pzena Investment Management’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|OM Asset Management||9.49%||114.45%||12.94%|
|Pzena Investment Management||14.41%||12.92%||6.18%|
OM Asset Management pays an annual dividend of $0.36 per share and has a dividend yield of 2.3%. Pzena Investment Management pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. OM Asset Management pays out 52.9% of its earnings in the form of a dividend. Pzena Investment Management pays out 17.1% 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.
Institutional & Insider Ownership
65.0% of OM Asset Management shares are held by institutional investors. Comparatively, 17.7% of Pzena Investment Management shares are held by institutional investors. 1.5% of OM Asset Management shares are held by company insiders. Comparatively, 57.4% of Pzena Investment Management shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
OM Asset Management has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500. Comparatively, Pzena Investment Management has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.
This is a breakdown of recent ratings for OM Asset Management and Pzena Investment Management, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|OM Asset Management||0||0||6||0||3.00|
|Pzena Investment Management||0||1||0||0||2.00|
OM Asset Management currently has a consensus target price of $18.30, indicating a potential upside of 14.66%. Given OM Asset Management’s stronger consensus rating and higher probable upside, analysts clearly believe OM Asset Management is more favorable than Pzena Investment Management.
OM Asset Management beats Pzena Investment Management on 10 of the 16 factors compared between the two stocks.
About OM Asset Management
OM Asset Management plc is a global, diversified, multi-boutique asset management company. As of December 31, 2016, the Company operated its business through its eight Affiliates, each of which operated autonomously and employed its own investment processes. Its Affiliates include Acadian Asset Management LLC; Barrow, Hanley, Mewhinney & Strauss, LLC; Campbell Global, LLC; Copper Rock Capital Partners LLC; Heitman LLC; Investment Counselors of Maryland, LLC; Landmark Partners, LLC, and Thompson, Siegel & Walmsley LLC. It works with boutique asset managers, and the Company leverages the resources within its organization to engage with its Affiliates and provide them with capabilities unavailable to specialist asset management firms. The Company works with its Affiliates to identify and execute upon opportunities for their businesses in areas, such as business line expansion and product development, as well as activities required for the operation of investment boutiques.
About Pzena Investment Management
Pzena Investment Management, Inc. is a holding company. The Company is the sole managing member of Pzena Investment Management, LLC. Pzena Investment Management, LLC is an investment management company. The Company also serves as the general partner of Pzena Investment Management, LP. The Company offers institutional investment products to public and corporate pension funds, endowments, foundations and certain commingled vehicles geared toward institutional investors. The Company also offers access to certain of its global and non-United States strategies through private placement vehicles and collective investment trusts. Pzena Investment Management, LLC is its operating company. Pzena Investment Management, LLC consists of Class A and Class B membership units.
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