Financial Engines (FNGN) & Pzena Investment Management (PZN) Critical Review
Pzena Investment Management (NYSE: PZN) and Financial Engines (NASDAQ:FNGN) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.
This is a breakdown of recent ratings and target prices for Pzena Investment Management and Financial Engines, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pzena Investment Management||0||1||0||0||2.00|
Financial Engines has a consensus target price of $43.00, indicating a potential upside of 17.49%. Given Financial Engines’ stronger consensus rating and higher probable upside, analysts plainly believe Financial Engines is more favorable than Pzena Investment Management.
Valuation & Earnings
This table compares Pzena Investment Management and Financial Engines’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pzena Investment Management||$122.22 million||1.57||$56.40 million||$0.66||16.82|
|Financial Engines||$458.22 million||5.04||$84.14 million||$0.64||57.19|
Financial Engines has higher revenue and earnings than Pzena Investment Management. Pzena Investment Management is trading at a lower price-to-earnings ratio than Financial Engines, indicating that it is currently the more affordable of the two stocks.
This table compares Pzena Investment Management and Financial Engines’ 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%|
Insider and Institutional Ownership
17.4% of Pzena Investment Management shares are held by institutional investors. 55.9% of Pzena Investment Management shares are held by insiders. Comparatively, 16.0% of Financial Engines shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Pzena Investment Management pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Financial Engines pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Pzena Investment Management pays out 18.2% of its earnings in the form of a dividend. Financial Engines pays out 43.8% 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. Pzena Investment Management is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Pzena Investment Management has a beta of 1.65, meaning that its stock price is 65% more volatile than the S&P 500. Comparatively, Financial Engines has a beta of 2.2, meaning that its stock price is 120% more volatile than the S&P 500.
Financial Engines beats Pzena Investment Management on 9 of the 16 factors compared between the two stocks.
Pzena Investment Management Company Profile
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.
Financial Engines Company Profile
Financial Engines, Inc. is a provider of independent, technology-enabled financial advisory services, discretionary portfolio management, personalized investment advice, financial and retirement income planning, and financial education and guidance. The Company offers personalized plans for saving, investing, and generating retirement income, as well as by providing assessments of retirement income needs and readiness. The Company’s advice and planning services cover employer-sponsored defined contribution (DC) accounts (401(k), 457, and 403(b) plans), individual retirement account (IRA) accounts, and taxable accounts. For individuals, the Company provides discretionary portfolio management, personalized investment advice, financial and retirement income planning, financial education and guidance. The Company maintains two types of relationships with individuals: DC plan participants in the workplace and Individuals outside the workplace.
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