Gamco Investors (NYSE:GBL) versus Brookfield Asset Management (BAM) Financial Analysis

Gamco Investors (NYSE: GBL) and Brookfield Asset Management (NYSE:BAM) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.

Valuation and Earnings

This table compares Gamco Investors and Brookfield Asset Management’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Gamco Investors $353.00 million 2.35 $117.12 million $3.20 8.89
Brookfield Asset Management N/A N/A N/A C$0.46 91.35

Gamco Investors has higher revenue and earnings than Brookfield Asset Management. Gamco Investors is trading at a lower price-to-earnings ratio than Brookfield Asset Management, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Gamco Investors and Brookfield Asset Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gamco Investors 26.81% -63.12% 45.24%
Brookfield Asset Management 10.14% 3.40% 2.23%

Institutional & Insider Ownership

25.4% of Gamco Investors shares are owned by institutional investors. 79.0% of Gamco Investors shares are owned by 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

Gamco Investors has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Brookfield Asset Management has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.

Dividends

Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Brookfield Asset Management does not pay a dividend. Gamco Investors pays out 2.5% of its earnings in the form of a dividend. Gamco Investors has increased its dividend for 5 consecutive years and Brookfield Asset Management has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Gamco Investors and Brookfield Asset Management, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gamco Investors 0 0 0 0 N/A
Brookfield Asset Management 0 0 6 0 3.00

Brookfield Asset Management has a consensus price target of C$47.00, indicating a potential upside of 11.85%. Given Brookfield Asset Management’s higher probable upside, analysts clearly believe Brookfield Asset Management is more favorable than Gamco Investors.

Summary

Gamco Investors beats Brookfield Asset Management on 7 of the 12 factors compared between the two stocks.

About Gamco Investors

GAMCO Investors, Inc. is a holding company. The Company is a provider of investment advisory services to open and closed-end funds, institutional and private wealth management investors principally in the United States. The Company operates through the investment advisory and asset management business segment. It manages assets on a discretionary basis and invests in securities through various investment styles. Its assets under management are organized into three groups: Institutional and Private Wealth Management; Open and Closed-End Funds, and the GAMCO International SICAV (SICAV). The Company provides advisory services to a range of investors, including corporate retirement plans, foundations, endowments and private wealth clients, and also serves as sub-advisor to third-party investment funds, including registered investment companies. As of December 31, 2016, it had provided advisory services to 21 open-end funds, 15 closed-end funds and one exchange traded managed fund.

About Brookfield Asset Management

Brookfield Asset Management Inc. is an alternative asset manager. The Company operates in eight segments. The Asset Management segment manages its listed partnerships, private funds and public markets on behalf of its clients. The Property segment includes the ownership, operation and development of office, retail and other properties. The Renewable power segment operates and develops hydroelectric, wind power and other generating facilities. The Infrastructure segment includes the ownership, operation and development of utilities and agricultural operations, among others. The Residential development segment includes homebuilding, condominium development and land development. The Service activities segment includes construction management and contracting services and property services. The Private equity segment includes the investments and operations overseen by its private equity group. The Corporate activities segment includes the allocation of capital to its operating platforms.

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