Contrasting Cohen & Steers (CNS) and Financial Engines (FNGN)

Cohen & Steers (NYSE: CNS) and Financial Engines (NASDAQ:FNGN) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, dividends, institutional ownership, analyst recommendations and earnings.

Dividends

Cohen & Steers pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. Financial Engines pays an annual dividend of $0.28 per share and has a dividend yield of 1.0%. Cohen & Steers pays out 53.8% of its earnings in the form of a dividend. Financial Engines pays out 36.4% 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. Financial Engines has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of recent ratings and price targets for Cohen & Steers and Financial Engines, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cohen & Steers 1 2 1 0 2.00
Financial Engines 1 1 5 0 2.57

Cohen & Steers presently has a consensus target price of $43.00, suggesting a potential downside of 7.69%. Financial Engines has a consensus target price of $38.33, suggesting a potential upside of 30.16%. Given Financial Engines’ stronger consensus rating and higher possible upside, analysts clearly believe Financial Engines is more favorable than Cohen & Steers.

Institutional and Insider Ownership

44.5% of Cohen & Steers shares are owned by institutional investors. 52.9% of Cohen & Steers shares are owned by insiders. Comparatively, 9.3% of Financial Engines shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Cohen & Steers has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500. Comparatively, Financial Engines has a beta of 2.15, suggesting that its share price is 115% more volatile than the S&P 500.

Valuation & Earnings

This table compares Cohen & Steers and Financial Engines’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cohen & Steers $349.88 million 6.17 $92.93 million $2.08 22.39
Financial Engines $423.94 million 4.40 $28.56 million $0.77 38.25

Cohen & Steers has higher earnings, but lower revenue than Financial Engines. Cohen & Steers is trading at a lower price-to-earnings ratio than Financial Engines, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cohen & Steers and Financial Engines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cohen & Steers 26.53% 32.82% 25.31%
Financial Engines 10.56% 7.60% 6.95%

Summary

Cohen & Steers beats Financial Engines on 9 of the 17 factors compared between the two stocks.

Cohen & Steers Company Profile

Cohen & Steers, Inc. (CNS) is a holding company. The Company is an investment manager with a focus on liquid real assets, including real estate securities, listed infrastructure, commodities and natural resource equities, as well as preferred securities and other income solutions. The Company serves institutional and individual investors. The Company manages three types of investment vehicles: institutional accounts, open-end funds and closed-end funds. The Company also provides services in connection with model-based strategies (MBS) accounts. In addition, the Company provides several services in connection with assets held by unit investment trusts (UITs). As a portfolio consultant to a number of UITs, the Company constructs a portfolio of securities that suit the investment objective of the UIT. The Company also provides ongoing portfolio monitoring services and provides a license to certain firms to use its name in connection with certain of their investment products.

Financial Engines Company Profile

Financial Engines, Inc. is a provider of independent, technology-enabled financial advisory services, discretionary portfolio management, personalized investment advice, financial and retirement income planning, and financial education and guidance. The Company offers personalized plans for saving, investing, and generating retirement income, as well as by providing assessments of retirement income needs and readiness. The Company’s advice and planning services cover employer-sponsored defined contribution (DC) accounts (401(k), 457, and 403(b) plans), individual retirement account (IRA) accounts, and taxable accounts. For individuals, the Company provides discretionary portfolio management, personalized investment advice, financial and retirement income planning, financial education and guidance. The Company maintains two types of relationships with individuals: DC plan participants in the workplace and Individuals outside the workplace.

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