Reviewing OM Asset Management PLC (NYSE:OMAM) and Federated Investors (FII)
OM Asset Management PLC (NYSE: OMAM) and Federated Investors (NYSE:FII) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, dividends, institutional ownership, profitability, valuation, analyst recommendations and risk.
OM Asset Management PLC pays an annual dividend of $0.36 per share and has a dividend yield of 2.6%. Federated Investors pays an annual dividend of $1.00 per share and has a dividend yield of 3.6%. OM Asset Management PLC pays out 45.6% of its earnings in the form of a dividend. Federated Investors pays out 48.1% 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.
This table compares OM Asset Management PLC and Federated Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|OM Asset Management PLC||12.12%||86.89%||12.46%|
Earnings & Valuation
This table compares OM Asset Management PLC and Federated Investors’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|OM Asset Management PLC||$772.40 million||1.99||$164.10 million||$0.79||17.46|
|Federated Investors||$1.13 billion||2.37||$345.66 million||$2.08||13.19|
Federated Investors has higher revenue and earnings than OM Asset Management PLC. Federated Investors is trading at a lower price-to-earnings ratio than OM Asset Management PLC, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and target prices for OM Asset Management PLC and Federated Investors, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|OM Asset Management PLC||0||0||6||0||3.00|
OM Asset Management PLC presently has a consensus price target of $17.88, indicating a potential upside of 29.62%. Federated Investors has a consensus price target of $23.50, indicating a potential downside of 14.33%. Given OM Asset Management PLC’s stronger consensus rating and higher probable upside, research analysts plainly believe OM Asset Management PLC is more favorable than Federated Investors.
Risk and Volatility
OM Asset Management PLC has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500. Comparatively, Federated Investors has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.
Institutional & Insider Ownership
47.9% of OM Asset Management PLC shares are held by institutional investors. Comparatively, 84.9% of Federated Investors shares are held by institutional investors. 1.5% of OM Asset Management PLC shares are held by company insiders. Comparatively, 7.1% of Federated Investors shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Federated Investors beats OM Asset Management PLC on 9 of the 16 factors compared between the two stocks.
About OM Asset Management PLC
OM Asset Management plc is a global, diversified, multi-boutique asset management company. As of December 31, 2016, the Company operated its business through its eight Affiliates, each of which operated autonomously and employed its own investment processes. Its Affiliates include Acadian Asset Management LLC; Barrow, Hanley, Mewhinney & Strauss, LLC; Campbell Global, LLC; Copper Rock Capital Partners LLC; Heitman LLC; Investment Counselors of Maryland, LLC; Landmark Partners, LLC, and Thompson, Siegel & Walmsley LLC. It works with boutique asset managers, and the Company leverages the resources within its organization to engage with its Affiliates and provide them with capabilities unavailable to specialist asset management firms. The Company works with its Affiliates to identify and execute upon opportunities for their businesses in areas, such as business line expansion and product development, as well as activities required for the operation of investment boutiques.
About Federated Investors
Federated Investors, Inc. (Federated) is a provider of investment management products and related financial services. Federated operates through investment management business segment. It is engaged in sponsoring, marketing and providing investment-related services to various investment products, including mutual funds and Separate Accounts, which include separately managed accounts, institutional accounts, sub-advised funds and other managed products. It operates in one segment, the investment management business. As of December 31, 2016, Federated provided investment advisory services to 124 sponsored investment companies and other funds (Federated Funds). It markets these funds to banks, brokers and dealers and other financial intermediaries using them to meet the needs of their customers and clients, including retail investors, corporations and retirement plans. The Company offers a range of products and strategies, including money market, equity and fixed-income investments.
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