Contrasting Invesco (NYSE:IVZ) & ONEX (OTCMKTS:ONEXF)

Invesco (NYSE:IVZ) and ONEX (OTCMKTS:ONEXF) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Earnings and Valuation

This table compares Invesco and ONEX”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invesco	$6.38 billion	1.77	-$281.70 million	($1.47)	-17.34
ONEX	$899.00 million	6.36	$617.00 million	$8.87	9.40

ONEX has lower revenue, but higher earnings than Invesco. Invesco is trading at a lower price-to-earnings ratio than ONEX, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Invesco and ONEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Invesco	-6.92%	10.26%	4.09%
ONEX	68.63%	7.16%	4.75%

Volatility and Risk

Invesco has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, ONEX has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500.

Dividends

Invesco pays an annual dividend of $0.84 per share and has a dividend yield of 3.3%. ONEX pays an annual dividend of $0.29 per share and has a dividend yield of 0.3%. Invesco pays out -57.1% of its earnings in the form of a dividend. ONEX pays out 3.3% 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. Invesco has increased its dividend for 5 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Invesco and ONEX, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Invesco	0	11	4	0	2.27
ONEX	0	1	2	0	2.67

Invesco currently has a consensus price target of $27.46, suggesting a potential upside of 7.72%. Given Invesco’s higher possible upside, research analysts plainly believe Invesco is more favorable than ONEX.

Insider & Institutional Ownership

66.1% of Invesco shares are owned by institutional investors. Comparatively, 0.7% of ONEX shares are owned by institutional investors. 1.4% of Invesco shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Invesco beats ONEX on 10 of the 17 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 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

About ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.