The Carlyle Group (NASDAQ: CG) and Eaton Vance (NYSE:EV) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.
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, Eaton Vance has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500.
This table compares The Carlyle Group and Eaton Vance’s top-line 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||1.05||$6.40 million||$1.76||13.84|
|Eaton Vance||$1.53 billion||4.69||$282.13 million||$2.42||25.08|
Eaton Vance has lower revenue, but higher earnings than The Carlyle Group. The Carlyle Group is trading at a lower price-to-earnings ratio than Eaton Vance, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
38.0% of The Carlyle Group shares are held by institutional investors. Comparatively, 68.7% of Eaton Vance shares are held by institutional investors. 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.
This table compares The Carlyle Group and Eaton Vance’s 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%|
The Carlyle Group pays an annual dividend of $2.24 per share and has a dividend yield of 9.2%. Eaton Vance pays an annual dividend of $1.24 per share and has a dividend yield of 2.0%. 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. Eaton Vance pays out 51.2% of its earnings in the form of a dividend. The Carlyle Group has increased its dividend for 37 consecutive years. The Carlyle Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings and target prices for The Carlyle Group and Eaton Vance, 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 price target of $24.63, suggesting a potential upside of 1.13%. Eaton Vance has a consensus price target of $51.36, suggesting a potential downside of 15.38%. Given The Carlyle Group’s stronger consensus rating and higher possible upside, equities research analysts clearly believe The Carlyle Group is more favorable than Eaton Vance.
Eaton Vance 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 Eaton Vance
Eaton Vance Corp. is engaged in the business of managing investment funds and providing investment management and advisory services to high-net-worth individuals and institutions. The Company operates as an investment advisor to funds and separate accounts. The Company, through its subsidiaries and other affiliates, manages active equity, income and alternative strategies across a range of investment styles and asset classes, including the United States and global equities, floating-rate bank loans, municipal bonds, global income, high-yield and investment grade bonds. Through its subsidiary, the Company also manages a range of engineered alpha strategies, including systematic equity, systematic alternatives and managed options strategies. The Company’s open-end fund lineup includes tax-managed equity funds, and non-tax-managed equity and multi-asset funds. The Company’s family of closed-end funds includes municipal bond, domestic and global equity, and bank loan.
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