Apollo Global Management (NYSE: APO) and Affiliated Managers Group (NYSE:AMG) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, risk, analyst recommendations, earnings and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations for Apollo Global Management and Affiliated Managers Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apollo Global Management 0 3 8 0 2.73
Affiliated Managers Group 0 2 5 0 2.71

Apollo Global Management presently has a consensus target price of $29.30, suggesting a potential downside of 1.51%. Affiliated Managers Group has a consensus target price of $196.86, suggesting a potential upside of 10.35%. Given Affiliated Managers Group’s higher possible upside, analysts plainly believe Affiliated Managers Group is more favorable than Apollo Global Management.

Dividends

Apollo Global Management pays an annual dividend of $1.96 per share and has a dividend yield of 6.6%. Affiliated Managers Group pays an annual dividend of $0.80 per share and has a dividend yield of 0.4%. Apollo Global Management pays out 76.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Affiliated Managers Group pays out 8.9% of its earnings in the form of a dividend.

Insider & Institutional Ownership

74.8% of Apollo Global Management shares are owned by institutional investors. Comparatively, 95.3% of Affiliated Managers Group shares are owned by institutional investors. 4.1% of Apollo Global Management shares are owned by insiders. Comparatively, 1.4% of Affiliated Managers Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Apollo Global Management and Affiliated Managers Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Apollo Global Management $2.21 billion 2.59 $493.45 million $2.56 11.62
Affiliated Managers Group $2.21 billion 4.52 $842.60 million $9.02 19.78

Apollo Global Management is trading at a lower price-to-earnings ratio than Affiliated Managers Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Apollo Global Management and Affiliated Managers Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apollo Global Management 21.79% 59.61% 19.32%
Affiliated Managers Group 22.99% 17.45% 8.75%

Volatility & Risk

Apollo Global Management has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Affiliated Managers Group has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500.

Summary

Affiliated Managers Group beats Apollo Global Management on 9 of the 15 factors compared between the two stocks.

About Apollo Global Management

Apollo Global Management, LLC (Apollo) is an alternative investment manager in private equity, credit and real estate. The Company raises, invests and manages funds on behalf of pension, endowment and sovereign wealth funds, as well as other institutional and individual investors. The Company’s segments include private equity, credit and real estate. The private equity segment invests in control equity and related debt instruments, convertible securities and distressed debt investments. The credit segment invests in non-control corporate and structured debt instruments, including performing, stressed and distressed investments across the capital structure. The real estate segment invests in real estate equity for the acquisition and recapitalization of real estate assets, portfolios, platforms and operating companies, and real estate debt, including first mortgage and mezzanine loans, preferred equity and commercial mortgage backed securities.

About Affiliated Managers Group

Affiliated Managers Group, Inc. is an asset management company with equity investments in boutique investment management firms. The Company operates in three segments, which represent its principal distribution channels: Institutional, Mutual Fund and High Net Worth. The equity method investments in the Institutional distribution channel are made in relationships with public and private client entities, including foundations, endowments, sovereign wealth funds and retirement plans for corporations and municipalities. The equity method investments in the Mutual Fund distribution channel are made in advisory or sub-advisory relationships with active return-oriented mutual funds, Undertakings for Collective Investment in Transferable Securities and other retail products. The equity method investments in the High Net Worth distribution channel are made in relationships with high net worth and ultra-high net worth individuals, families, trusts, foundations, endowments and retirement plans.

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