Critical Review: The Carlyle Group (CG) vs. Federated Investors (FII)
The Carlyle Group (NASDAQ: CG) and Federated Investors (NYSE:FII) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.
The Carlyle Group pays an annual dividend of $2.24 per share and has a dividend yield of 11.2%. Federated Investors pays an annual dividend of $1.00 per share and has a dividend yield of 3.0%. The Carlyle Group pays out 127.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Federated Investors pays out 47.6% of its earnings in the form of a dividend.
38.1% of The Carlyle Group shares are held by institutional investors. Comparatively, 85.6% of Federated Investors shares are held by institutional investors. 7.1% of Federated Investors shares are held by company 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.
This is a breakdown of recent ratings and target prices for The Carlyle Group and Federated Investors, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Carlyle Group||0||3||6||0||2.67|
The Carlyle Group currently has a consensus target price of $24.50, suggesting a potential upside of 22.19%. Federated Investors has a consensus target price of $28.00, suggesting a potential downside of 17.01%. Given The Carlyle Group’s stronger consensus rating and higher probable upside, research analysts clearly believe The Carlyle Group is more favorable than Federated Investors.
Risk & Volatility
The Carlyle Group has a beta of 1.79, meaning that its share price is 79% more volatile than the S&P 500. Comparatively, Federated Investors has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500.
This table compares The Carlyle Group and Federated Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Carlyle Group||5.43%||43.32%||7.82%|
Earnings & Valuation
This table compares The Carlyle Group and Federated Investors’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|The Carlyle Group||$2.27 billion||0.86||$6.40 million||$1.76||11.39|
|Federated Investors||$1.14 billion||2.98||$208.91 million||$2.10||16.07|
Federated Investors has lower revenue, but higher earnings than The Carlyle Group. The Carlyle Group is trading at a lower price-to-earnings ratio than Federated Investors, indicating that it is currently the more affordable of the two stocks.
Federated Investors beats The Carlyle Group on 9 of the 16 factors compared between the two stocks.
About The Carlyle Group
The Carlyle Group L.P. is a diversified multi-product global alternative asset management firm. The Company operates in four segments: Corporate Private Equity (CPE), Real Assets, Global Market Strategies (GMS) and Investment Solutions. Corporate Private Equity advises its buyout and growth capital funds, which pursue various corporate investments of different sizes and growth potentials. As of December 31, 2016, the Real Assets segment advised its 26 active carry funds focused on real estate, infrastructure and energy and natural resources (including power). As of December 31, 2016, the Global Market Strategies segment advised a group of 57 active funds that pursue investment strategies, including leveraged loans and structured credit, energy mezzanine opportunities, middle market lending and distressed debt. Its Investment Solutions segment provides investment opportunities and resources for its investors and clients.
About Federated Investors
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.
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