Financial Contrast: The Carlyle Group L.P. (CG) and KKR & Co. L.P. (NYSE:KKR)

The Carlyle Group L.P. (NASDAQ: CG) and KKR & Co. L.P. (NYSE:KKR) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for The Carlyle Group L.P. and KKR & Co. L.P., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Carlyle Group L.P. 0 4 4 0 2.50
KKR & Co. L.P. 0 3 7 0 2.70

The Carlyle Group L.P. currently has a consensus target price of $24.43, suggesting a potential upside of 9.06%. KKR & Co. L.P. has a consensus target price of $21.89, suggesting a potential upside of 7.56%. Given The Carlyle Group L.P.’s higher probable upside, equities analysts clearly believe The Carlyle Group L.P. is more favorable than KKR & Co. L.P..

Volatility & Risk

The Carlyle Group L.P. has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500. Comparatively, KKR & Co. L.P. has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.

Earnings and Valuation

This table compares The Carlyle Group L.P. and KKR & Co. L.P.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Carlyle Group L.P. $3.21 billion 0.64 $894.40 million $1.31 17.10
KKR & Co. L.P. $5.31 billion 1.80 $930.57 million $1.98 10.28

KKR & Co. L.P. has higher revenue and earnings than The Carlyle Group L.P.. KKR & Co. L.P. is trading at a lower price-to-earnings ratio than The Carlyle Group L.P., indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

40.7% of The Carlyle Group L.P. shares are held by institutional investors. Comparatively, 65.6% of KKR & Co. L.P. shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

The Carlyle Group L.P. pays an annual dividend of $1.68 per share and has a dividend yield of 7.5%. KKR & Co. L.P. pays an annual dividend of $0.68 per share and has a dividend yield of 3.3%. The Carlyle Group L.P. pays out 128.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KKR & Co. L.P. pays out 34.3% of its earnings in the form of a dividend.

Profitability

This table compares The Carlyle Group L.P. and KKR & Co. L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Carlyle Group L.P. 4.13% 41.32% 7.03%
KKR & Co. L.P. 35.65% 9.61% 4.01%

Summary

KKR & Co. L.P. beats The Carlyle Group L.P. on 9 of the 15 factors compared between the two stocks.

About The Carlyle Group L.P.

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 KKR & Co. L.P.

KKR & CO. L.P. (KKR) is a global investment firm that manages investments across multiple asset classes, including private equity, energy, infrastructure, real estate, credit and hedge funds. The Company’s business offers a range of investment management services to its fund investors, and provides capital markets services to its firm, its portfolio companies and third parties. The Company conducts its business with offices across the world, providing it with a global platform for sourcing transactions, raising capital and carrying out capital markets activities. The Company operates through four segments: Private Markets, Public Markets, Capital Markets and Principal Activities. It operates and reports its combined credit and hedge funds businesses through the Public Markets segment. The Capital Markets segment consists primarily of its global capital markets business. Through its Principal Activities segment, the Company manages the firm’s assets and deploys capital.

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