Head-To-Head Analysis: Goldman Sachs BDC (GSBD) versus Affiliated Managers Group (AMG)
Goldman Sachs BDC (NYSE: GSBD) and Affiliated Managers Group (NYSE:AMG) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, analyst recommendations, valuation, institutional ownership, profitability and earnings.
This table compares Goldman Sachs BDC and Affiliated Managers Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Goldman Sachs BDC||32.19%||11.34%||6.65%|
|Affiliated Managers Group||29.92%||18.61%||9.52%|
Goldman Sachs BDC pays an annual dividend of $1.80 per share and has a dividend yield of 8.8%. Affiliated Managers Group pays an annual dividend of $0.80 per share and has a dividend yield of 0.4%. Goldman Sachs BDC pays out -818.2% of its earnings in the form of a dividend. Affiliated Managers Group pays out 6.6% 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. Goldman Sachs BDC has increased its dividend for 2 consecutive years. Goldman Sachs BDC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings for Goldman Sachs BDC and Affiliated Managers Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Goldman Sachs BDC||0||1||3||0||2.75|
|Affiliated Managers Group||0||3||4||0||2.57|
Goldman Sachs BDC presently has a consensus price target of $22.80, suggesting a potential upside of 11.17%. Affiliated Managers Group has a consensus price target of $224.00, suggesting a potential upside of 24.28%. Given Affiliated Managers Group’s higher probable upside, analysts clearly believe Affiliated Managers Group is more favorable than Goldman Sachs BDC.
Institutional and Insider Ownership
36.3% of Goldman Sachs BDC shares are held by institutional investors. Comparatively, 95.7% of Affiliated Managers Group shares are held by institutional investors. 0.3% of Goldman Sachs BDC shares are held by insiders. Comparatively, 1.4% of Affiliated Managers Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Goldman Sachs BDC and Affiliated Managers Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Goldman Sachs BDC||$125.11 million||6.58||$40.65 million||($0.22)||-93.23|
|Affiliated Managers Group||$2.31 billion||4.35||$689.50 million||$12.07||14.93|
Affiliated Managers Group has higher revenue and earnings than Goldman Sachs BDC. Goldman Sachs BDC is trading at a lower price-to-earnings ratio than Affiliated Managers Group, indicating that it is currently the more affordable of the two stocks.
Affiliated Managers Group beats Goldman Sachs BDC on 10 of the 16 factors compared between the two stocks.
About Goldman Sachs BDC
Goldman Sachs BDC, Inc. is a closed-end management investment company. The Company is a specialty finance company, which is focused on lending to middle-market companies. The Company’s investment objective is to generate current income and, to a lesser extent, capital appreciation primarily through direct originations of secured debt, including first lien, including first lien, unitranche, including last out portions of such loans, and second lien debt, and unsecured debt, including mezzanine debt, as well as through select equity investments. The Company invests primarily in the United States middle-market companies. The Company invests in illiquid securities, including debt and equity investments, of middle-market companies. As of December 31, 2016, its portfolio included first lien/senior secured debt, first lien/last-out unitranche, second lien/senior secured debt, unsecured debt, preferred stock, common stock, and investment funds and vehicles.
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.
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