WisdomTree Investments (WETF) and Fifth Street Asset Management (FSAM) Critical Analysis
WisdomTree Investments (NASDAQ: WETF) and Fifth Street Asset Management (NASDAQ:FSAM) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.
Valuation and Earnings
This table compares WisdomTree Investments and Fifth Street Asset Management’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WisdomTree Investments||$212.91 million||7.22||$55.10 million||$0.22||51.87|
|Fifth Street Asset Management||$71.87 million||0.87||$35.88 million||($0.14)||-28.57|
WisdomTree Investments has higher revenue and earnings than Fifth Street Asset Management. Fifth Street Asset Management is trading at a lower price-to-earnings ratio than WisdomTree Investments, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
WisdomTree Investments has a beta of 3.15, suggesting that its share price is 215% more volatile than the S&P 500. Comparatively, Fifth Street Asset Management has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500.
This table compares WisdomTree Investments and Fifth Street Asset Management’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fifth Street Asset Management||-0.63%||-399.09%||11.43%|
WisdomTree Investments pays an annual dividend of $0.32 per share and has a dividend yield of 2.8%. Fifth Street Asset Management pays an annual dividend of $0.25 per share and has a dividend yield of 6.3%. WisdomTree Investments pays out 145.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fifth Street Asset Management pays out -178.6% of its earnings in the form of a dividend. Fifth Street Asset Management is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of current ratings and price targets for WisdomTree Investments and Fifth Street Asset Management, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fifth Street Asset Management||0||1||0||0||2.00|
WisdomTree Investments presently has a consensus price target of $10.88, indicating a potential downside of 4.69%. Fifth Street Asset Management has a consensus price target of $4.00, indicating a potential upside of 0.00%. Given Fifth Street Asset Management’s higher possible upside, analysts plainly believe Fifth Street Asset Management is more favorable than WisdomTree Investments.
Insider and Institutional Ownership
92.5% of WisdomTree Investments shares are held by institutional investors. Comparatively, 8.6% of Fifth Street Asset Management shares are held by institutional investors. 16.1% of WisdomTree Investments shares are held by company insiders. Comparatively, 86.0% of Fifth Street Asset Management shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
WisdomTree Investments beats Fifth Street Asset Management on 11 of the 15 factors compared between the two stocks.
WisdomTree Investments Company Profile
WisdomTree Investments, Inc. is an asset management company that focuses on exchange-traded funds (ETFs). The Company’s family of ETFs includes funds that track its own indexes, funds that track third party indexes and actively managed funds. It operates as an exchange traded products sponsor and asset manager providing investment advisory services in the United States, Europe, Canada and Japan. These activities are reported in its U.S. Business segment that comprises its the United States business and Japan sales office, which primarily engages in selling its United States listed ETFs to Japanese institutions, and International Business segment, that comprises its European business and Canadian business. Its United States listed products include International Hedged Equity ETFs, Equity ETFs, Fixed Income ETFs, Currency ETFs, Alternative Strategy ETFs and Commodity ETFs. Its portfolio of Non-the United States listed products include WisdomTree UCITS ETFs, Boost ETPs and Canadian ETFs.
Fifth Street Asset Management Company Profile
Fifth Street Asset Management Inc. is an alternative asset manager. The Company provides asset management services to its investment funds (the Fifth Street Funds or the funds), which consist of Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR), both publicly-traded business development companies (together, the BDCs). Its segment provides asset management services to the Fifth Street Funds. The Company conducts all of its operations through its subsidiaries, Fifth Street Management LLC (FSM), Fifth Street CLO Management LLC (CLO Management) and FSCO GP LLC (FSCO GP). The funds, managed by the Company, provide financing solutions to small and mid-sized companies across their capital structures, mainly in connection with investments by private equity sponsors. It provides credit solutions across the capital structure, including one-stop financing, unitranche debt, senior secured debt, mezzanine debt, equity co-investments and venture debt financing.
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