Federated Investors (NYSE: FII) and Medley Management (NASDAQ:MDLY) are both financials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

This table compares Federated Investors and Medley Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federated Investors 20.57% 33.84% 19.77%
Medley Management 33.42% N/A 15.58%

Valuation & Earnings

This table compares Federated Investors and Medley Management’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Federated Investors $1.13 billion 2.61 $345.66 million $2.10 14.40
Medley Management $67.57 million 0.45 $27.69 million N/A N/A

Federated Investors has higher revenue and earnings than Medley Management.

Dividends

Federated Investors pays an annual dividend of $1.00 per share and has a dividend yield of 3.3%. Medley Management does not pay a dividend. Federated Investors pays out 47.6% of its earnings in the form of a dividend.

Insider & Institutional Ownership

83.3% of Federated Investors shares are owned by institutional investors. 7.1% of Federated Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Federated Investors and Medley Management, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federated Investors 2 6 0 0 1.75
Medley Management 0 5 0 0 2.00

Federated Investors currently has a consensus price target of $27.43, suggesting a potential downside of 9.27%. Medley Management has a consensus price target of $9.20, suggesting a potential upside of 61.40%. Given Medley Management’s stronger consensus rating and higher possible upside, analysts plainly believe Medley Management is more favorable than Federated Investors.

Summary

Federated Investors beats Medley Management on 8 of the 13 factors compared between the two stocks.

Federated Investors Company Profile

Federated Investors, Inc. (Federated) is a provider of investment management products and related financial services. Federated operates through investment management business segment. It is engaged in sponsoring, marketing and providing investment-related services to various investment products, including mutual funds and Separate Accounts, which include separately managed accounts, institutional accounts, sub-advised funds and other managed products. It operates in one segment, the investment management business. As of December 31, 2016, Federated provided investment advisory services to 124 sponsored investment companies and other funds (Federated Funds). It markets these funds to banks, brokers and dealers and other financial intermediaries using them to meet the needs of their customers and clients, including retail investors, corporations and retirement plans. The Company offers a range of products and strategies, including money market, equity and fixed-income investments.

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

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