Financial Analysis: Pzena Investment Management (PZN) vs. Cohen & Steers (CNS)
Pzena Investment Management (NYSE: PZN) and Cohen & Steers (NYSE:CNS) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.
This table compares Pzena Investment Management and Cohen & Steers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pzena Investment Management||14.82%||12.93%||6.38%|
|Cohen & Steers||26.34%||33.17%||26.42%|
Pzena Investment Management pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. Cohen & Steers pays an annual dividend of $1.12 per share and has a dividend yield of 3.0%. Pzena Investment Management pays out 18.2% of its earnings in the form of a dividend. Cohen & Steers pays out 54.4% 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. Cohen & Steers has increased its dividend for 5 consecutive years. Cohen & Steers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Pzena Investment Management and Cohen & Steers’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pzena Investment Management||$122.22 million||1.31||$56.40 million||$0.66||13.98|
|Cohen & Steers||$366.32 million||4.75||$150.50 million||$2.06||18.23|
Cohen & Steers has higher revenue and earnings than Pzena Investment Management. Pzena Investment Management is trading at a lower price-to-earnings ratio than Cohen & Steers, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings for Pzena Investment Management and Cohen & Steers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pzena Investment Management||0||1||0||0||2.00|
|Cohen & Steers||1||2||1||0||2.00|
Cohen & Steers has a consensus target price of $44.33, indicating a potential upside of 18.03%. Given Cohen & Steers’ higher probable upside, analysts plainly believe Cohen & Steers is more favorable than Pzena Investment Management.
Volatility & Risk
Pzena Investment Management has a beta of 1.63, suggesting that its share price is 63% more volatile than the S&P 500. Comparatively, Cohen & Steers has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.
Institutional and Insider Ownership
17.4% of Pzena Investment Management shares are held by institutional investors. Comparatively, 45.4% of Cohen & Steers shares are held by institutional investors. 57.4% of Pzena Investment Management shares are held by insiders. Comparatively, 52.9% of Cohen & Steers shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Cohen & Steers beats Pzena Investment Management on 13 of the 16 factors compared between the two stocks.
About Pzena Investment Management
Pzena Investment Management, Inc. is a holding company. The Company is the sole managing member of Pzena Investment Management, LLC. Pzena Investment Management, LLC is an investment management company. The Company also serves as the general partner of Pzena Investment Management, LP. The Company offers institutional investment products to public and corporate pension funds, endowments, foundations and certain commingled vehicles geared toward institutional investors. The Company also offers access to certain of its global and non-United States strategies through private placement vehicles and collective investment trusts. Pzena Investment Management, LLC is its operating company. Pzena Investment Management, LLC consists of Class A and Class B membership units.
About Cohen & Steers
Cohen & Steers, Inc. (CNS) is a holding company. The Company is an investment manager with a focus on liquid real assets, including real estate securities, listed infrastructure, commodities and natural resource equities, as well as preferred securities and other income solutions. The Company serves institutional and individual investors. The Company manages three types of investment vehicles: institutional accounts, open-end funds and closed-end funds. The Company also provides services in connection with model-based strategies (MBS) accounts. In addition, the Company provides several services in connection with assets held by unit investment trusts (UITs). As a portfolio consultant to a number of UITs, the Company constructs a portfolio of securities that suit the investment objective of the UIT. The Company also provides ongoing portfolio monitoring services and provides a license to certain firms to use its name in connection with certain of their investment products.
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