Critical Analysis: Fortress Investment Group (FIG) vs. Noah Holdings (NOAH)
Fortress Investment Group (NYSE: FIG) and Noah Holdings (NYSE:NOAH) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitabiliy, institutional ownership, earnings, risk, dividends and analyst recommendations.
Fortress Investment Group pays an annual dividend of $0.36 per share and has a dividend yield of 4.5%. Noah Holdings does not pay a dividend. Fortress Investment Group pays out 116.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Institutional and Insider Ownership
43.5% of Fortress Investment Group shares are held by institutional investors. Comparatively, 42.5% of Noah Holdings shares are held by institutional investors. 45.2% of Fortress Investment Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares Fortress Investment Group and Noah Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fortress Investment Group||8.26%||41.94%||16.42%|
This is a summary of current ratings and price targets for Fortress Investment Group and Noah Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fortress Investment Group||0||4||0||0||2.00|
Fortress Investment Group presently has a consensus price target of $6.00, suggesting a potential downside of 25.19%. Noah Holdings has a consensus price target of $29.00, suggesting a potential upside of 4.73%. Given Noah Holdings’ stronger consensus rating and higher probable upside, analysts plainly believe Noah Holdings is more favorable than Fortress Investment Group.
Volatility & Risk
Fortress Investment Group has a beta of 1.96, meaning that its stock price is 96% more volatile than the S&P 500. Comparatively, Noah Holdings has a beta of 2.24, meaning that its stock price is 124% more volatile than the S&P 500.
Valuation and Earnings
This table compares Fortress Investment Group and Noah Holdings’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Fortress Investment Group||$933.37 million||1.87||$209.67 million||$0.31||25.87|
|Noah Holdings||$384.97 million||4.05||$112.40 million||$1.67||16.58|
Fortress Investment Group has higher revenue and earnings than Noah Holdings. Noah Holdings is trading at a lower price-to-earnings ratio than Fortress Investment Group, indicating that it is currently the more affordable of the two stocks.
Noah Holdings beats Fortress Investment Group on 9 of the 16 factors compared between the two stocks.
Fortress Investment Group Company Profile
Fortress Investment Group LLC (Fortress) is an investment management firm. The Company operates through segments, including private equity funds, permanent capital vehicles, credit hedge funds, credit PE funds, liquid hedge funds and Logan Circle. Its business is to sponsor the formation of, and provide investment management services for, various investment funds, permanent capital vehicles and related managed accounts (the Fortress Funds). Fortress’s sources of income from the Fortress Funds are management fees, incentive income and investment income on its investments in the funds. As of December 31, 2016, the Company’s private equity business manages approximately $13.5 billion of assets under management (AUM); credit funds business manages approximately $18.1 billion of AUM; liquid hedge funds business manages over $4.6 billion of AUM, and Logan Circle business manages approximately $33.4 billion of AUM.
Noah Holdings Company Profile
Noah Holdings Limited is a wealth management service provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. The Company operates through three segments: wealth management, asset management and Internet finance. It also provides Internet finance services to clients in China. It provides direct access to China’s high net worth population. With approximately 1,100 relationship managers in over 130 branch offices, its coverage network includes China’s regions where high net worth population is concentrated, including the Yangtze River Delta, the Pearl River Delta, the Bohai Rim and other regions. Its product offerings consist primarily of over-the-counter (OTC) wealth management and OTC asset management products, mutual fund products and asset management plans originated in China and designed to cater to the needs of China’s high net worth population.
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