Medley Management (NASDAQ: MDLY) and Artisan Partners Asset Management (NYSE:APAM) are both small-cap financials companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitabiliy, institutional ownership and valuation.

Dividends

Artisan Partners Asset Management pays an annual dividend of $2.40 per share and has a dividend yield of 8.0%. Medley Management does not pay a dividend. Artisan Partners Asset Management pays out 151.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Medley Management and Artisan Partners Asset Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medley Management 33.22% N/A 14.30%
Artisan Partners Asset Management 10.47% 61.99% 7.56%

Analyst Ratings

This is a summary of recent recommendations and price targets for Medley Management and Artisan Partners Asset Management, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medley Management 0 5 1 0 2.17
Artisan Partners Asset Management 1 4 2 0 2.14

Medley Management currently has a consensus price target of $9.21, indicating a potential upside of 42.76%. Artisan Partners Asset Management has a consensus price target of $28.64, indicating a potential downside of 4.52%. Given Medley Management’s stronger consensus rating and higher possible upside, analysts plainly believe Medley Management is more favorable than Artisan Partners Asset Management.

Institutional and Insider Ownership

98.1% of Artisan Partners Asset Management shares are owned by institutional investors. 40.3% of Artisan Partners Asset Management shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Medley Management and Artisan Partners Asset Management’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Medley Management $72.45 million 0.50 $23.59 million N/A N/A
Artisan Partners Asset Management $730.40 million 2.02 $242.89 million $1.58 18.99

Artisan Partners Asset Management has higher revenue and earnings than Medley Management.

Summary

Artisan Partners Asset Management beats Medley Management on 8 of the 14 factors compared between the two stocks.

About Medley Management

Medley Management Inc. is an asset management firm offering yield solutions to retail and institutional investors. The Company operates in the investment management segment. It is focused on credit-related investment strategies, primarily originating senior secured loans to private middle market companies in the United States. The Company generally holds these loans to maturity. Its national direct origination franchise provides capital to the middle market in the United States. The Company has over $4.8 billion of assets under management (AUM) in approximately two business development companies (BDCs), Medley Capital Corporation (MCC) and Sierra Income Corporation (SIC), as well as private investment vehicles. It has over $5 billion of AUM. The Company provides capital to over 300 companies across approximately 35 industries in North America. The Company’s long-dated private funds include MOF I, MOF II and MOF III. Its private funds are managed through partnership structures

About Artisan Partners Asset Management

Artisan Partners Asset Management Inc. is an investment management company. The Company provides a range of the United States, non-United States and global investment strategies, each of which is managed by one of its investment teams. The Company provides investment management services to separate accounts, mutual funds and other pooled investment vehicles. The Company offers its investment management services primarily to institutions and through intermediaries that operate with institutional-like decision-making processes and have long-term investment horizons. The Company provides clients with multiple equity investment strategies spanning market capitalization segments and investing styles in both the United States and non-United States markets. The Company also offers one fixed income strategy, the Artisan High Income strategy. Each strategy is managed by one of the investment teams.

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