Invesco (NYSE:IVZ) and U.S. Global Investors (NASDAQ:GROW) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Dividends

Invesco pays an annual dividend of $1.20 per share and has a dividend yield of 6.5%. U.S. Global Investors pays an annual dividend of $0.03 per share and has a dividend yield of 2.6%. Invesco pays out 49.4% of its earnings in the form of a dividend. Invesco has increased its dividend for 10 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

79.7% of Invesco shares are owned by institutional investors. Comparatively, 22.7% of U.S. Global Investors shares are owned by institutional investors. 1.8% of Invesco shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Invesco and U.S. Global Investors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Invesco 0 8 2 0 2.20
U.S. Global Investors 0 0 0 0 N/A

Invesco presently has a consensus target price of $24.00, suggesting a potential upside of 29.17%. Given Invesco’s higher probable upside, research analysts plainly believe Invesco is more favorable than U.S. Global Investors.

Earnings and Valuation

This table compares Invesco and U.S. Global Investors’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Invesco $5.31 billion 1.44 $882.80 million $2.43 7.65
U.S. Global Investors $6.26 million 2.81 $640,000.00 N/A N/A

Invesco has higher revenue and earnings than U.S. Global Investors.

Volatility and Risk

Invesco has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500. Comparatively, U.S. Global Investors has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Profitability

This table compares Invesco and U.S. Global Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Invesco 16.61% 10.88% 3.11%
U.S. Global Investors -29.56% -5.84% -5.26%

Summary

Invesco beats U.S. Global Investors on 12 of the 14 factors compared between the two stocks.

About Invesco

Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in December 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

About U.S. Global Investors

U.S. Global Investors, Inc. is a publicly owned investment manager. The firm primarily provides its services to investment companies. It also provides its services to pooled investment vehicles. The firm manages equity and fixed income mutual funds for its clients. It also manages hedge funds. The firm also manages exchange traded funds. It invests in the public equity and fixed income markets across the globe. It invests in G.A.R.P. and value stocks to make its equity investments. The firm employs a fundamental and quantitative analysis with top-down and bottom-up stock picking approach to make its investments. U.S. Global Investors, Inc. was founded in 1968 and is based in San Antonio, Texas.

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