Legg Mason (NYSE: LM) is one of 53 publicly-traded companies in the “Investment Management & Fund Operators” industry, but how does it contrast to its rivals? We will compare Legg Mason to related companies based on the strength of its profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Profitability

This table compares Legg Mason and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Legg Mason 8.21% 6.84% 3.35%
Legg Mason Competitors -46.91% 10.48% 5.74%

Valuation and Earnings

This table compares Legg Mason and its rivals revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Legg Mason $2.98 billion $572.31 million 15.70
Legg Mason Competitors $3.00 billion $961.92 million 6.45

Legg Mason’s rivals have higher revenue and earnings than Legg Mason. Legg Mason is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Legg Mason has a beta of 2.21, indicating that its stock price is 121% more volatile than the S&P 500. Comparatively, Legg Mason’s rivals have a beta of 1.23, indicating that their average stock price is 23% more volatile than the S&P 500.

Dividends

Legg Mason pays an annual dividend of $1.12 per share and has a dividend yield of 3.0%. Legg Mason pays out 46.5% of its earnings in the form of a dividend. As a group, “Investment Management & Fund Operators” companies pay a dividend yield of 2.8% and pay out 49.4% of their earnings in the form of a dividend. Legg Mason has increased its dividend for 7 consecutive years. Legg Mason is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Legg Mason and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Legg Mason 2 3 4 0 2.22
Legg Mason Competitors 357 1775 1792 62 2.39

Legg Mason currently has a consensus target price of $42.50, indicating a potential upside of 12.32%. As a group, “Investment Management & Fund Operators” companies have a potential upside of 6.09%. Given Legg Mason’s higher probable upside, analysts clearly believe Legg Mason is more favorable than its rivals.

Institutional and Insider Ownership

82.3% of Legg Mason shares are held by institutional investors. Comparatively, 62.1% of shares of all “Investment Management & Fund Operators” companies are held by institutional investors. 12.7% of Legg Mason shares are held by company insiders. Comparatively, 10.4% of shares of all “Investment Management & Fund Operators” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Legg Mason beats its rivals on 8 of the 15 factors compared.

Legg Mason Company Profile

Legg Mason, Inc. is a holding company. The Company and its subsidiaries are principally engaged in providing asset management and related financial services to individuals, institutions, corporations and municipalities. The Company operates through Global Asset Management segment. Global Asset Management provides investment advisory services to institutional and individual clients and to the Company-sponsored investment funds. The Company, through its subsidiaries, provides investment management and related services to institutional and individual clients, Company-sponsored investment funds and retail separately managed account programs. It offers its products and services directly and through various financial intermediaries. It has operations principally in the United States and the United Kingdom and also has offices in Australia, Bahamas, Brazil, Canada, Chile, China, Dubai, France, Germany, Italy, Japan, Luxembourg, Poland, Singapore, Spain, Switzerland and Taiwan.

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