Affiliated Managers Group (NYSE: AMG) and Garrison Capital (NASDAQ:GARS) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Insider & Institutional Ownership

95.3% of Affiliated Managers Group shares are owned by institutional investors. Comparatively, 22.6% of Garrison Capital shares are owned by institutional investors. 1.4% of Affiliated Managers Group shares are owned by insiders. Comparatively, 5.8% of Garrison Capital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Affiliated Managers Group and Garrison Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Affiliated Managers Group 22.99% 17.45% 8.75%
Garrison Capital -0.38% 8.33% 3.97%

Risk & Volatility

Affiliated Managers Group has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Garrison Capital has a beta of 0.25, meaning that its share price is 75% less volatile than the S&P 500.

Dividends

Affiliated Managers Group pays an annual dividend of $0.80 per share and has a dividend yield of 0.5%. Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.1%. Affiliated Managers Group pays out 8.9% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Affiliated Managers Group and Garrison Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Affiliated Managers Group $2.21 billion 4.43 $842.60 million $9.02 19.39
Garrison Capital N/A N/A N/A N/A N/A

Affiliated Managers Group has higher revenue and earnings than Garrison Capital.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Affiliated Managers Group and Garrison Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Affiliated Managers Group 0 2 5 0 2.71
Garrison Capital 0 5 1 0 2.17

Affiliated Managers Group presently has a consensus price target of $196.86, indicating a potential upside of 12.57%. Garrison Capital has a consensus price target of $10.17, indicating a potential upside of 19.19%. Given Garrison Capital’s higher probable upside, analysts clearly believe Garrison Capital is more favorable than Affiliated Managers Group.

Summary

Affiliated Managers Group beats Garrison Capital on 8 of the 12 factors compared between the two stocks.

About Affiliated Managers Group

Affiliated Managers Group, Inc. is an asset management company with equity investments in boutique investment management firms. The Company operates in three segments, which represent its principal distribution channels: Institutional, Mutual Fund and High Net Worth. The equity method investments in the Institutional distribution channel are made in relationships with public and private client entities, including foundations, endowments, sovereign wealth funds and retirement plans for corporations and municipalities. The equity method investments in the Mutual Fund distribution channel are made in advisory or sub-advisory relationships with active return-oriented mutual funds, Undertakings for Collective Investment in Transferable Securities and other retail products. The equity method investments in the High Net Worth distribution channel are made in relationships with high net worth and ultra-high net worth individuals, families, trusts, foundations, endowments and retirement plans.

About Garrison Capital

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

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