Critical Analysis: UBS AG (UBS) versus Gamco Investors (GBL)
UBS AG (NYSE: UBS) and Gamco Investors (NYSE:GBL) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.
This table compares UBS AG and Gamco Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
UBS AG pays an annual dividend of $0.60 per share and has a dividend yield of 3.5%. Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. UBS AG pays out 55.0% of its earnings in the form of a dividend. Gamco Investors pays out 2.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. UBS AG has increased its dividend for 5 consecutive years and Gamco Investors has increased its dividend for 4 consecutive years. UBS AG is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares UBS AG and Gamco Investors’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|UBS AG||$36.28 billion||1.81||$3.25 billion||$1.09||15.61|
|Gamco Investors||$353.00 million||2.34||$117.12 million||$3.20||8.85|
UBS AG has higher revenue and earnings than Gamco Investors. Gamco Investors is trading at a lower price-to-earnings ratio than UBS AG, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
UBS AG has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500. Comparatively, Gamco Investors has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500.
Insider & Institutional Ownership
31.6% of UBS AG shares are owned by institutional investors. Comparatively, 25.4% of Gamco Investors shares are owned by institutional investors. 1.0% of UBS AG shares are owned by insiders. Comparatively, 80.0% of Gamco Investors shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations for UBS AG and Gamco Investors, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
UBS AG beats Gamco Investors on 9 of the 15 factors compared between the two stocks.
About UBS AG
UBS Group AG is a holding company and conducts its operations through UBS AG and its subsidiaries. The Company comprises Corporate Center and five business divisions: Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management and the Investment Bank. Wealth Management division provides advice and tailored financial services to wealthy private clients around the world, except those served by Wealth Management Americas. Wealth Management Americas division is a wealth manager in the Americas in terms of financial advisor productivity and invested assets by financial advisor. Personal & Corporate Banking division provides financial products and services to private, corporate and institutional clients in Switzerland. Asset Management division provides investment management products and services, platform solutions and advisory support. Investment Bank division provides investment advice, financial solutions and capital markets access.
About Gamco Investors
GAMCO Investors, Inc. is a holding company. The Company is a provider of investment advisory services to open and closed-end funds, institutional and private wealth management investors principally in the United States. The Company operates through the investment advisory and asset management business segment. It manages assets on a discretionary basis and invests in securities through various investment styles. Its assets under management are organized into three groups: Institutional and Private Wealth Management; Open and Closed-End Funds, and the GAMCO International SICAV (SICAV). The Company provides advisory services to a range of investors, including corporate retirement plans, foundations, endowments and private wealth clients, and also serves as sub-advisor to third-party investment funds, including registered investment companies. As of December 31, 2016, it had provided advisory services to 21 open-end funds, 15 closed-end funds and one exchange traded managed fund.
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