Fifth Street Asset Management (FSAM) versus Its Rivals Critical Contrast

Fifth Street Asset Management (OTCMKTS: FSAM) is one of 57 public companies in the “Investment Management” industry, but how does it contrast to its peers? We will compare Fifth Street Asset Management to similar businesses based on the strength of its valuation, dividends, institutional ownership, earnings, risk, profitability and analyst recommendations.

Insider and Institutional Ownership

8.6% of Fifth Street Asset Management shares are owned by institutional investors. Comparatively, 46.9% of shares of all “Investment Management” companies are owned by institutional investors. 85.4% of Fifth Street Asset Management shares are owned by company insiders. Comparatively, 26.8% of shares of all “Investment Management” companies are owned by company 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.

Dividends

Fifth Street Asset Management pays an annual dividend of $0.25 per share and has a dividend yield of 6.2%. Fifth Street Asset Management pays out -39.7% of its earnings in the form of a dividend. As a group, “Investment Management” companies pay a dividend yield of 3.4% and pay out 67.9% of their earnings in the form of a dividend. Fifth Street Asset Management is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Profitability

This table compares Fifth Street Asset Management and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fifth Street Asset Management -20.92% -626.41% -2.71%
Fifth Street Asset Management Competitors 26.13% 108.70% 26.28%

Analyst Ratings

This is a summary of recent ratings and target prices for Fifth Street Asset Management and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fifth Street Asset Management 0 0 0 0 N/A
Fifth Street Asset Management Competitors 668 2135 2190 37 2.32

As a group, “Investment Management” companies have a potential downside of 2.72%. Given Fifth Street Asset Management’s peers higher probable upside, analysts clearly believe Fifth Street Asset Management has less favorable growth aspects than its peers.

Volatility & Risk

Fifth Street Asset Management has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, Fifth Street Asset Management’s peers have a beta of 1.45, suggesting that their average share price is 45% more volatile than the S&P 500.

Valuation and Earnings

This table compares Fifth Street Asset Management and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Fifth Street Asset Management $82.55 million -$1.53 million -6.43
Fifth Street Asset Management Competitors $997.79 million $160.95 million 875.10

Fifth Street Asset Management’s peers have higher revenue and earnings than Fifth Street Asset Management. Fifth Street Asset Management is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Fifth Street Asset Management peers beat Fifth Street Asset Management on 9 of the 12 factors compared.

Fifth Street Asset Management Company Profile

Fifth Street Asset Management Inc. is an alternative asset manager. The Company provides asset management services to its investment funds (the Fifth Street Funds or the funds), which consist of Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR), both publicly-traded business development companies (together, the BDCs). Its segment provides asset management services to the Fifth Street Funds. The Company conducts all of its operations through its subsidiaries, Fifth Street Management LLC (FSM), Fifth Street CLO Management LLC (CLO Management) and FSCO GP LLC (FSCO GP). The funds, managed by the Company, provide financing solutions to small and mid-sized companies across their capital structures, mainly in connection with investments by private equity sponsors. It provides credit solutions across the capital structure, including one-stop financing, unitranche debt, senior secured debt, mezzanine debt, equity co-investments and venture debt financing.

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