Critical Comparison: Waddell & Reed Financial (WDR) vs. Its Competitors
Waddell & Reed Financial (NYSE: WDR) is one of 55 publicly-traded companies in the “Investment Management & Fund Operators” industry, but how does it weigh in compared to its peers? We will compare Waddell & Reed Financial to related companies based on the strength of its institutional ownership, valuation, earnings, analyst recommendations, dividends, risk and profitability.
Institutional and Insider Ownership
96.5% of Waddell & Reed Financial shares are owned by institutional investors. Comparatively, 62.2% of shares of all “Investment Management & Fund Operators” companies are owned by institutional investors. 3.8% of Waddell & Reed Financial shares are owned by company insiders. Comparatively, 10.5% of shares of all “Investment Management & Fund Operators” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Waddell & Reed Financial pays an annual dividend of $1.84 per share and has a dividend yield of 9.5%. Waddell & Reed Financial pays out 132.4% 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 47.8% of their earnings in the form of a dividend. Waddell & Reed Financial has raised its dividend for 6 consecutive years.
This table compares Waddell & Reed Financial and its peers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Waddell & Reed Financial||10.10%||16.81%||10.22%|
|Waddell & Reed Financial Competitors||-210.01%||-1.67%||3.16%|
Volatility & Risk
Waddell & Reed Financial has a beta of 2.09, indicating that its stock price is 109% more volatile than the S&P 500. Comparatively, Waddell & Reed Financial’s peers have a beta of 1.26, indicating that their average stock price is 26% more volatile than the S&P 500.
This is a summary of current ratings and recommmendations for Waddell & Reed Financial and its peers, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Waddell & Reed Financial||5||2||0||0||1.29|
|Waddell & Reed Financial Competitors||285||1660||1775||57||2.42|
Waddell & Reed Financial presently has a consensus price target of $18.43, suggesting a potential downside of 4.71%. As a group, “Investment Management & Fund Operators” companies have a potential upside of 0.30%. Given Waddell & Reed Financial’s peers stronger consensus rating and higher possible upside, analysts clearly believe Waddell & Reed Financial has less favorable growth aspects than its peers.
Earnings and Valuation
This table compares Waddell & Reed Financial and its peers gross revenue, earnings per share and valuation.
|Gross Revenue||NetIncome||Price/Earnings Ratio|
|Waddell & Reed Financial||$1.24 billion||$146.90 million||13.91|
|Waddell & Reed Financial Competitors||$6.06 billion||$896.42 million||14.97|
Waddell & Reed Financial’s peers have higher revenue and earnings than Waddell & Reed Financial. Waddell & Reed Financial is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.
Waddell & Reed Financial peers beat Waddell & Reed Financial on 9 of the 15 factors compared.
About Waddell & Reed Financial
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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