Brookfield Asset Management (NYSE: BAM) and Affiliated Managers Group (NYSE:AMG) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

53.8% of Brookfield Asset Management shares are held by institutional investors. Comparatively, 96.2% of Affiliated Managers Group shares are held by institutional investors. 1.4% of Affiliated Managers Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Brookfield Asset Management 4.87% 2.10% 0.84%
Affiliated Managers Group 22.99% 17.45% 8.75%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Brookfield Asset Management and Affiliated Managers Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brookfield Asset Management 0 1 7 0 2.88
Affiliated Managers Group 0 2 5 0 2.71

Brookfield Asset Management currently has a consensus price target of $43.56, suggesting a potential upside of 12.22%. Affiliated Managers Group has a consensus price target of $196.86, suggesting a potential upside of 13.99%. Given Affiliated Managers Group’s higher possible upside, analysts plainly believe Affiliated Managers Group is more favorable than Brookfield Asset Management.

Valuation & Earnings

This table compares Brookfield Asset Management and Affiliated Managers Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Brookfield Asset Management $30.02 billion 1.24 $8.47 billion $1.28 30.33
Affiliated Managers Group $2.21 billion 4.37 $842.60 million $9.02 19.15

Brookfield Asset Management has higher revenue and earnings than Affiliated Managers Group. Affiliated Managers Group is trading at a lower price-to-earnings ratio than Brookfield Asset Management, indicating that it is currently the more affordable of the two stocks.

Dividends

Brookfield Asset Management pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. Affiliated Managers Group pays an annual dividend of $0.80 per share and has a dividend yield of 0.5%. Brookfield Asset Management pays out 43.8% of its earnings in the form of a dividend. Affiliated Managers Group pays out 8.9% 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. Brookfield Asset Management has raised its dividend for 5 consecutive years. Brookfield Asset Management is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Brookfield Asset Management has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Affiliated Managers Group has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500.

Summary

Affiliated Managers Group beats Brookfield Asset Management on 10 of the 17 factors compared between the two stocks.

Brookfield Asset Management Company Profile

Brookfield Asset Management Inc. is an alternative asset manager. The Company operates in eight segments. The Asset Management segment manages its listed partnerships, private funds and public markets on behalf of its clients. The Property segment includes the ownership, operation and development of office, retail and other properties. The Renewable power segment operates and develops hydroelectric, wind power and other generating facilities. The Infrastructure segment includes the ownership, operation and development of utilities and agricultural operations, among others. The Residential development segment includes homebuilding, condominium development and land development. The Service activities segment includes construction management and contracting services and property services. The Private equity segment includes the investments and operations overseen by its private equity group. The Corporate activities segment includes the allocation of capital to its operating platforms.

Affiliated Managers Group Company Profile

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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