Waddell & Reed Financial (NYSE: WDR) is one of 55 public companies in the “Investment Management & Fund Operators” industry, but how does it compare to its rivals? We will compare Waddell & Reed Financial to similar companies based on the strength of its valuation, profitability, dividends, analyst recommendations, risk, institutional ownership and earnings.

Dividends

Waddell & Reed Financial pays an annual dividend of $1.84 per share and has a dividend yield of 9.1%. Waddell & Reed Financial pays out 115.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Investment Management & Fund Operators” companies pay a dividend yield of 2.6% and pay out 49.1% of their earnings in the form of a dividend. Waddell & Reed Financial has raised its dividend for 6 consecutive years.

Risk & Volatility

Waddell & Reed Financial has a beta of 2.04, suggesting that its stock price is 104% more volatile than the S&P 500. Comparatively, Waddell & Reed Financial’s rivals have a beta of 1.23, suggesting that their average stock price is 23% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Waddell & Reed Financial and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Waddell & Reed Financial 4 2 0 0 1.33
Waddell & Reed Financial Competitors 280 1642 1766 57 2.43

Waddell & Reed Financial currently has a consensus price target of $18.17, suggesting a potential downside of 10.24%. As a group, “Investment Management & Fund Operators” companies have a potential upside of 8.02%. Given Waddell & Reed Financial’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Waddell & Reed Financial has less favorable growth aspects than its rivals.

Earnings and Valuation

This table compares Waddell & Reed Financial and its rivals revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Waddell & Reed Financial $1.17 billion $241.86 million 12.73
Waddell & Reed Financial Competitors $2.89 billion $931.92 million 7.33

Waddell & Reed Financial’s rivals have higher revenue and earnings than Waddell & Reed Financial. Waddell & Reed Financial 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.

Institutional and Insider Ownership

96.4% of Waddell & Reed Financial shares are held by institutional investors. Comparatively, 62.1% of shares of all “Investment Management & Fund Operators” companies are held by institutional investors. 3.8% of Waddell & Reed Financial shares are held by company insiders. Comparatively, 10.5% of shares of all “Investment Management & Fund Operators” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Waddell & Reed Financial and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Waddell & Reed Financial 11.34% 18.75% 11.31%
Waddell & Reed Financial Competitors -45.49% 7.50% 4.98%

Summary

Waddell & Reed Financial rivals beat Waddell & Reed Financial on 8 of the 15 factors compared.

Waddell & Reed Financial Company Profile

Waddell & Reed Financial, Inc., incorporated on December 24, 1981, is a holding company. The Company is a mutual fund and asset management company. The Company provides investment management, investment advisory, investment product underwriting, and distribution and shareholder services administration to Waddell & Reed Advisors group of mutual funds (the Advisors Funds), Ivy Funds, Ivy Funds Variable Insurance Portfolios (Ivy Funds VIP), InvestEd Portfolios and 529 college savings plan (collectively, the Funds), and the Ivy Global Investors Fund SICAV (the SICAV) and its Ivy Global Investors sub-funds (the IGI Funds), and institutional and separately managed accounts. The Company operates its business through a distribution network. Its retail products are distributed through third parties, such as other broker-dealers, registered investment advisors and various retirement platforms or through associated independent contractor financial advisors.

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