T. Rowe Price Group (NASDAQ: TROW) and Medley Management (NYSE:MDLY) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, earnings, valuation, institutional ownership, risk, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for T. Rowe Price Group and Medley Management, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
T. Rowe Price Group 2 7 1 0 1.90
Medley Management 0 3 0 0 2.00

T. Rowe Price Group presently has a consensus price target of $80.75, suggesting a potential downside of 4.03%. Medley Management has a consensus price target of $9.75, suggesting a potential upside of 66.67%. Given Medley Management’s stronger consensus rating and higher possible upside, analysts clearly believe Medley Management is more favorable than T. Rowe Price Group.

Valuation & Earnings

This table compares T. Rowe Price Group and Medley Management’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
T. Rowe Price Group $4.47 billion 4.52 $2.06 billion $5.82 14.46
Medley Management $67.57 million 0.46 $27.69 million $0.19 30.79

T. Rowe Price Group has higher revenue and earnings than Medley Management. T. Rowe Price Group is trading at a lower price-to-earnings ratio than Medley Management, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

74.2% of T. Rowe Price Group shares are held by institutional investors. Comparatively, 65.6% of Medley Management shares are held by institutional investors. 3.6% of T. Rowe Price Group shares are held by company insiders. Comparatively, 5.1% of Medley Management shares are held by company 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.

Dividends

T. Rowe Price Group pays an annual dividend of $2.28 per share and has a dividend yield of 2.7%. Medley Management pays an annual dividend of $0.80 per share and has a dividend yield of 13.7%. T. Rowe Price Group pays out 39.2% of its earnings in the form of a dividend. Medley Management pays out 421.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. T. Rowe Price Group has increased its dividend for 30 consecutive years.

Profitability

This table compares T. Rowe Price Group and Medley Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
T. Rowe Price Group 32.64% 24.38% 18.94%
Medley Management 2.68% -43.71% 17.11%

Risk and Volatility

T. Rowe Price Group has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Medley Management has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500.

Summary

T. Rowe Price Group beats Medley Management on 12 of the 17 factors compared between the two stocks.

T. Rowe Price Group Company Profile

T. Rowe Price Group, Inc. is a financial services holding company. The Company provides global investment management services through its subsidiaries to investors across the world. The Company provides an array of Company sponsored the United States mutual funds, other sponsored pooled investment vehicles, sub advisory services, separate account management, recordkeeping, and related services to individuals, advisors, institutions, financial intermediaries and retirement plan sponsors. The Company distributes its products in countries located within three geographical regions: North America, Europe Middle East and Africa (EMEA), and Asia Pacific (APAC). It also offers specialized advisory services, including management of stable value investment contracts and a distribution management service for the disposition of equity securities its clients receive from third-party venture capital investment pools. As of December 31, 2016, it serviced clients in 45 countries across the world.

Medley Management Company Profile

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

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