Ares Management L.P. (ARES) versus Pzena Investment Management (PZN) Head to Head Analysis

Pzena Investment Management (NYSE: PZN) and Ares Management L.P. (NYSE:ARES) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Dividends

Pzena Investment Management pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Ares Management L.P. pays an annual dividend of $1.24 per share and has a dividend yield of 6.6%. Pzena Investment Management pays out 16.9% of its earnings in the form of a dividend. Ares Management L.P. pays out 221.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Pzena Investment Management and Ares Management L.P.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Pzena Investment Management $108.34 million 6.63 $16.17 million $0.71 14.77
Ares Management L.P. $1.20 billion 1.29 $111.80 million $0.56 33.57

Ares Management L.P. has higher revenue and earnings than Pzena Investment Management. Pzena Investment Management is trading at a lower price-to-earnings ratio than Ares Management L.P., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Pzena Investment Management and Ares Management L.P.’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%
Ares Management L.P. 4.98% 39.54% 6.11%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Pzena Investment Management and Ares Management L.P., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pzena Investment Management 0 1 0 0 2.00
Ares Management L.P. 0 1 7 0 2.88

Ares Management L.P. has a consensus price target of $21.00, indicating a potential upside of 11.70%. Given Ares Management L.P.’s stronger consensus rating and higher possible upside, analysts clearly believe Ares Management L.P. is more favorable than Pzena Investment Management.

Institutional and Insider Ownership

17.4% of Pzena Investment Management shares are held by institutional investors. Comparatively, 15.1% of Ares Management L.P. shares are held by institutional investors. 57.4% of Pzena Investment Management shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Pzena Investment Management has a beta of 1.74, indicating that its share price is 74% more volatile than the S&P 500. Comparatively, Ares Management L.P. has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Summary

Pzena Investment Management beats Ares Management L.P. on 9 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 Ares Management L.P.

Ares Management, L.P. is an alternative asset manager. The Company offers its investors a range of investment strategies. It operates through three segments: Credit Group, Private Equity Group and Real Estate Group. The Credit Group segment manages credit strategies across the non-investment grade credit universe in the United States and Europe. It offers a range of credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, credit opportunities, structured credit investments and the United States and European direct lending. The Credit Group provides solutions for traditional fixed income investors. The Private Equity Group segment categorizes its investment strategies as corporate private equity, the United States power and energy infrastructure and special situations. The Real Estate Group segment manages public and private equity and debt strategies. The Real Estate Group manages both a value-add strategy and an opportunistic strategy.

Receive News & Ratings for Pzena Investment Management Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Pzena Investment Management Inc and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply