KKR & Co. L.P. (NYSE: KKR) and Eaton Vance Corporation (NYSE:EV) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for KKR & Co. L.P. and Eaton Vance Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KKR & Co. L.P. 0 3 6 0 2.67
Eaton Vance Corporation 0 5 1 0 2.17

KKR & Co. L.P. presently has a consensus price target of $21.33, indicating a potential upside of 14.02%. Eaton Vance Corporation has a consensus price target of $49.58, indicating a potential upside of 5.05%. Given KKR & Co. L.P.’s stronger consensus rating and higher possible upside, research analysts clearly believe KKR & Co. L.P. is more favorable than Eaton Vance Corporation.

Institutional & Insider Ownership

66.6% of KKR & Co. L.P. shares are held by institutional investors. Comparatively, 68.9% of Eaton Vance Corporation shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

KKR & Co. L.P. has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500. Comparatively, Eaton Vance Corporation has a beta of 1.85, meaning that its stock price is 85% more volatile than the S&P 500.

Valuation and Earnings

This table compares KKR & Co. L.P. and Eaton Vance Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
KKR & Co. L.P. $5.31 billion 1.66 $1.13 billion $2.41 7.76
Eaton Vance Corporation $1.47 billion 3.57 $475.21 million $2.30 20.52

KKR & Co. L.P. has higher revenue and earnings than Eaton Vance Corporation. KKR & Co. L.P. is trading at a lower price-to-earnings ratio than Eaton Vance Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

KKR & Co. L.P. pays an annual dividend of $0.68 per share and has a dividend yield of 3.6%. Eaton Vance Corporation pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. KKR & Co. L.P. pays out 28.2% of its earnings in the form of a dividend. Eaton Vance Corporation pays out 48.7% 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. Eaton Vance Corporation has increased its dividend for 36 consecutive years. KKR & Co. L.P. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares KKR & Co. L.P. and Eaton Vance Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KKR & Co. L.P. 42.48% 11.45% 4.79%
Eaton Vance Corporation 18.03% 34.47% 13.99%

Summary

KKR & Co. L.P. beats Eaton Vance Corporation on 9 of the 16 factors compared between the two stocks.

KKR & Co. L.P. Company Profile

KKR & CO. L.P. (KKR) is a global investment firm that manages investments across multiple asset classes, including private equity, energy, infrastructure, real estate, credit and hedge funds. The Company’s business offers a range of investment management services to its fund investors, and provides capital markets services to its firm, its portfolio companies and third parties. The Company conducts its business with offices across the world, providing it with a global platform for sourcing transactions, raising capital and carrying out capital markets activities. The Company operates through four segments: Private Markets, Public Markets, Capital Markets and Principal Activities. It operates and reports its combined credit and hedge funds businesses through the Public Markets segment. The Capital Markets segment consists primarily of its global capital markets business. Through its Principal Activities segment, the Company manages the firm’s assets and deploys capital.

Eaton Vance Corporation Company Profile

Eaton Vance Corp. is engaged in the business of managing investment funds and providing investment management and advisory services to high-net-worth individuals and institutions. The Company operates as an investment advisor to funds and separate accounts. The Company, through its subsidiaries and other affiliates, manages active equity, income and alternative strategies across a range of investment styles and asset classes, including the United States and global equities, floating-rate bank loans, municipal bonds, global income, high-yield and investment grade bonds. Through its subsidiary, the Company also manages a range of engineered alpha strategies, including systematic equity, systematic alternatives and managed options strategies. The Company’s open-end fund lineup includes tax-managed equity funds, and non-tax-managed equity and multi-asset funds. The Company’s family of closed-end funds includes municipal bond, domestic and global equity, and bank loan.

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