Pzena Investment Management (NYSE: PZN) and OM Asset Management (NYSE:OMAM) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.
Pzena Investment Management pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. OM Asset Management pays an annual dividend of $0.36 per share and has a dividend yield of 2.2%. Pzena Investment Management pays out 16.9% of its earnings in the form of a dividend. OM Asset Management pays out 52.9% 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.
This is a summary of recent ratings and price targets for Pzena Investment Management and OM Asset Management, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pzena Investment Management||0||1||0||0||2.00|
|OM Asset Management||0||0||6||0||3.00|
OM Asset Management has a consensus price target of $18.30, suggesting a potential upside of 11.52%. Given OM Asset Management’s stronger consensus rating and higher probable upside, analysts clearly believe OM Asset Management is more favorable than Pzena Investment Management.
This table compares Pzena Investment Management and OM Asset Management’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pzena Investment Management||14.41%||12.92%||6.18%|
|OM Asset Management||9.49%||114.45%||12.94%|
Institutional & Insider Ownership
17.7% of Pzena Investment Management shares are held by institutional investors. Comparatively, 65.0% of OM Asset Management shares are held by institutional investors. 55.9% of Pzena Investment Management shares are held by insiders. Comparatively, 1.5% of OM Asset Management shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Pzena Investment Management and OM Asset Management’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pzena Investment Management||$108.34 million||7.02||$16.17 million||$0.71||15.62|
|OM Asset Management||$663.50 million||2.71||$126.40 million||$0.68||24.13|
OM Asset Management has higher revenue and earnings than Pzena Investment Management. Pzena Investment Management is trading at a lower price-to-earnings ratio than OM Asset Management, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Pzena Investment Management has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500. Comparatively, OM Asset Management has a beta of 1.76, indicating that its stock price is 76% more volatile than the S&P 500.
OM Asset Management beats Pzena Investment Management on 10 of the 16 factors compared between the two stocks.
About Pzena Investment Management
Pzena Investment Management, Inc. is a holding company. The Company is the sole managing member of Pzena Investment Management, LLC. Pzena Investment Management, LLC is an investment management company. The Company also serves as the general partner of Pzena Investment Management, LP. The Company offers institutional investment products to public and corporate pension funds, endowments, foundations and certain commingled vehicles geared toward institutional investors. The Company also offers access to certain of its global and non-United States strategies through private placement vehicles and collective investment trusts. Pzena Investment Management, LLC is its operating company. Pzena Investment Management, LLC consists of Class A and Class B membership units.
About OM Asset Management
OM Asset Management plc is a global, diversified, multi-boutique asset management company. As of December 31, 2016, the Company operated its business through its eight Affiliates, each of which operated autonomously and employed its own investment processes. Its Affiliates include Acadian Asset Management LLC; Barrow, Hanley, Mewhinney & Strauss, LLC; Campbell Global, LLC; Copper Rock Capital Partners LLC; Heitman LLC; Investment Counselors of Maryland, LLC; Landmark Partners, LLC, and Thompson, Siegel & Walmsley LLC. It works with boutique asset managers, and the Company leverages the resources within its organization to engage with its Affiliates and provide them with capabilities unavailable to specialist asset management firms. The Company works with its Affiliates to identify and execute upon opportunities for their businesses in areas, such as business line expansion and product development, as well as activities required for the operation of investment boutiques.
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