Victory Capital (NASDAQ:VCTR) and Manning and Napier (NYSE:MN) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Dividends

Manning and Napier pays an annual dividend of $0.32 per share and has a dividend yield of 12.5%. Victory Capital does not pay a dividend. Manning and Napier pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

16.2% of Victory Capital shares are held by institutional investors. Comparatively, 51.5% of Manning and Napier shares are held by institutional investors. 3.4% of Manning and Napier shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Victory Capital and Manning and Napier’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Victory Capital $409.63 million 1.31 $25.82 million $1.25 6.33
Manning and Napier $201.53 million 0.20 $3.58 million $0.40 6.43

Victory Capital has higher revenue and earnings than Manning and Napier. Victory Capital is trading at a lower price-to-earnings ratio than Manning and Napier, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Victory Capital and Manning and Napier’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Victory Capital N/A N/A N/A
Manning and Napier 1.12% 15.05% 10.35%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Victory Capital and Manning and Napier, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Victory Capital 0 2 7 0 2.78
Manning and Napier 0 1 0 0 2.00

Victory Capital presently has a consensus target price of $13.81, suggesting a potential upside of 74.62%. Manning and Napier has a consensus target price of $4.00, suggesting a potential upside of 55.64%. Given Victory Capital’s stronger consensus rating and higher probable upside, analysts plainly believe Victory Capital is more favorable than Manning and Napier.

Summary

Victory Capital beats Manning and Napier on 8 of the 15 factors compared between the two stocks.

About Victory Capital

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an independent investment management company in the United States. It offers investment advisory, fund administration, and distribution services through broker-dealers, retirement platforms, and registered investment advisor networks. As of September 30, 2017, its franchises and solutions platform managed a set of 70 investment strategies for a range of institutional and retail clients. The company was founded in 2013 and is based in Brooklyn, Ohio.

About Manning and Napier

Manning & Napier, Inc. is publicly owned investment manager. It provides its services to net worth individuals and institutions, including 401(k) plans, pension plans, taft-hartley plans, endowments and foundations. The firm manages separate client-focused equity and fixed income portfolios. It invests in the public equity and fixed income markets of the United States. The firm employs fundamental analysis along with a combination of bottom-up and top-down stock picking approach to create its portfolios. Manning & Napier, Inc. was founded in 1970 and is based in Fairport, New York with additional offices in Dublin, Ohio; St. Petersburg, Florida; and Chicago, Illinois.

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