Medley Management (NYSE: MDLY) and Virtus Investment Partners (NASDAQ:VRTS) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Profitability

This table compares Medley Management and Virtus Investment Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medley Management 2.68% -43.71% 17.11%
Virtus Investment Partners 12.13% 11.35% 3.84%

Valuation and Earnings

This table compares Medley Management and Virtus Investment Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Medley Management $67.57 million 0.48 $27.69 million $0.19 32.37
Virtus Investment Partners $336.08 million 2.40 $73.41 million $5.14 21.75

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

Volatility and Risk

Medley Management has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Virtus Investment Partners has a beta of 1.74, suggesting that its share price is 74% more volatile than the S&P 500.

Dividends

Medley Management pays an annual dividend of $0.80 per share and has a dividend yield of 13.0%. Virtus Investment Partners pays an annual dividend of $1.80 per share and has a dividend yield of 1.6%. 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. Virtus Investment Partners pays out 35.0% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings for Medley Management and Virtus Investment Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medley Management 0 3 0 0 2.00
Virtus Investment Partners 1 4 0 0 1.80

Medley Management presently has a consensus target price of $9.75, indicating a potential upside of 58.54%. Virtus Investment Partners has a consensus target price of $119.40, indicating a potential upside of 6.80%. Given Medley Management’s stronger consensus rating and higher possible upside, research analysts clearly believe Medley Management is more favorable than Virtus Investment Partners.

Insider & Institutional Ownership

65.6% of Medley Management shares are held by institutional investors. Comparatively, 95.9% of Virtus Investment Partners shares are held by institutional investors. 5.1% of Medley Management shares are held by company insiders. Comparatively, 4.0% of Virtus Investment Partners shares are held by company insiders. 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.

Summary

Virtus Investment Partners beats Medley Management on 10 of the 15 factors compared between the two stocks.

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

Virtus Investment Partners Company Profile

Virtus Investment Partners, Inc. (Virtus) is a provider of investment management and related services to individuals and institutions. The Company provides its products in various forms and through multiple distribution channels. Its retail products include open-end mutual funds, closed-end funds, exchange traded funds, variable insurance funds, undertakings for collective investments in transferable securities (UCITS) and separately managed accounts. Its open-end mutual funds are distributed through intermediaries. Its closed-end funds trade on the New York Stock Exchange. Its variable insurance funds are available as investment options in variable annuities and life insurance products distributed by life insurance companies. Separately managed accounts consists of intermediary programs, sponsored and distributed by unaffiliated brokerage firms, and private client accounts, which are offered to the high net-worth clients of its affiliated managers.

Receive News & Ratings for Medley Management Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Medley Management Inc. and related companies with MarketBeat.com's FREE daily email newsletter.