Financial Contrast: Fortress Investment Group (FIG) versus Garrison Capital (GARS)
Fortress Investment Group (NYSE: FIG) and Garrison Capital (NASDAQ:GARS) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
40.2% of Fortress Investment Group shares are held by institutional investors. Comparatively, 22.0% of Garrison Capital shares are held by institutional investors. 45.2% of Fortress Investment Group shares are held by insiders. Comparatively, 5.8% of Garrison Capital shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Fortress Investment Group and Garrison Capital’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Fortress Investment Group||$950.66 million||1.84||$273.52 million||$0.44||18.16|
Fortress Investment Group has higher revenue and earnings than Garrison Capital.
Fortress Investment Group pays an annual dividend of $0.36 per share and has a dividend yield of 4.5%. Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.2%. Fortress Investment Group pays out 81.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Fortress Investment Group and Garrison Capital’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fortress Investment Group||10.61%||38.79%||15.58%|
This is a summary of recent recommendations for Fortress Investment Group and Garrison Capital, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fortress Investment Group||0||4||0||0||2.00|
Fortress Investment Group presently has a consensus price target of $6.00, indicating a potential downside of 24.91%. Garrison Capital has a consensus price target of $10.17, indicating a potential upside of 19.89%. Given Garrison Capital’s stronger consensus rating and higher possible upside, analysts plainly believe Garrison Capital is more favorable than Fortress Investment Group.
Volatility and Risk
Fortress Investment Group has a beta of 1.92, meaning that its share price is 92% more volatile than the S&P 500. Comparatively, Garrison Capital has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500.
Fortress Investment Group beats Garrison Capital on 8 of the 13 factors compared between the two stocks.
About Fortress Investment Group
Fortress Investment Group LLC (Fortress) is an investment management firm. The Company operates through segments, including private equity funds, permanent capital vehicles, credit hedge funds, credit PE funds, liquid hedge funds and Logan Circle. Its business is to sponsor the formation of, and provide investment management services for, various investment funds, permanent capital vehicles and related managed accounts (the Fortress Funds). Fortress’s sources of income from the Fortress Funds are management fees, incentive income and investment income on its investments in the funds. As of December 31, 2016, the Company’s private equity business manages approximately $13.5 billion of assets under management (AUM); credit funds business manages approximately $18.1 billion of AUM; liquid hedge funds business manages over $4.6 billion of AUM, and Logan Circle business manages approximately $33.4 billion of AUM.
About Garrison Capital
Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.
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