Critical Contrast: State Street Corporation (NYSE:STT) versus Brookfield Asset Management (BAM)
Brookfield Asset Management (NYSE: BAM) and State Street Corporation (NYSE:STT) are both large-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, dividends, profitabiliy, analyst recommendations, institutional ownership, risk and valuation.
This table compares Brookfield Asset Management and State Street Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Brookfield Asset Management||5.39%||2.12%||0.85%|
|State Street Corporation||20.54%||12.38%||0.92%|
Valuation & Earnings
This table compares Brookfield Asset Management and State Street Corporation’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Brookfield Asset Management||$26.74 billion||1.41||$8.19 billion||$1.25||31.57|
|State Street Corporation||$10.39 billion||3.33||$2.01 billion||$5.34||17.24|
Brookfield Asset Management has higher revenue and earnings than State Street Corporation. State Street Corporation 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.
Volatility & Risk
Brookfield Asset Management has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, State Street Corporation has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.
Institutional and Insider Ownership
53.5% of Brookfield Asset Management shares are owned by institutional investors. Comparatively, 88.0% of State Street Corporation shares are owned by institutional investors. 0.6% of State Street Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Brookfield Asset Management pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. State Street Corporation pays an annual dividend of $1.52 per share and has a dividend yield of 1.7%. Brookfield Asset Management pays out 44.8% of its earnings in the form of a dividend. State Street Corporation pays out 28.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Brookfield Asset Management has raised its dividend for 6 consecutive years and State Street Corporation has raised its dividend for 5 consecutive years. State Street Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of recent ratings and target prices for Brookfield Asset Management and State Street Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Brookfield Asset Management||0||1||6||0||2.86|
|State Street Corporation||2||9||2||1||2.14|
Brookfield Asset Management currently has a consensus target price of $41.57, suggesting a potential upside of 5.35%. State Street Corporation has a consensus target price of $87.46, suggesting a potential downside of 5.01%. Given Brookfield Asset Management’s stronger consensus rating and higher possible upside, analysts plainly believe Brookfield Asset Management is more favorable than State Street Corporation.
State Street Corporation beats Brookfield Asset Management on 11 of the 18 factors compared between the two stocks.
Brookfield Asset Management Company Profile
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.
State Street Corporation Company Profile
State Street Corporation is a financial holding company. The Company operates through two lines of business: Investment Servicing and Investment Management. The Company, through its subsidiary, State Street Bank and Trust Company (State Street Bank), provides a range of financial products and services to institutional investors across the world. Investment servicing line of business performs functions, such as providing institutional investors with clearing, settlement and payment services. The Company operates investment management line of business through State Street Global Advisors (SSGA). SSGA provides a range of investment management, investment research and investment advisory services to corporations, public funds and other investors. Its clients include mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments and investment managers.
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