Medley Management (NASDAQ: MDLY) and Virtus Investment Partners (NASDAQ:VRTS) are both small-cap financials companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, analyst recommendations and profitability.

Valuation and Earnings

This table compares Medley Management and Virtus Investment Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Medley Management $67.57 million 0.48 $27.69 million N/A N/A
Virtus Investment Partners $336.08 million 2.25 $73.41 million $5.14 20.36

Virtus Investment Partners has higher revenue and earnings than Medley Management.

Insider and Institutional Ownership

95.9% of Virtus Investment Partners shares are held by institutional investors. 4.0% of Virtus Investment Partners shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings for Medley Management and Virtus Investment Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medley Management 0 5 0 0 2.00
Virtus Investment Partners 1 3 0 0 1.75

Medley Management currently has a consensus price target of $9.20, indicating a potential upside of 52.07%. Virtus Investment Partners has a consensus price target of $121.00, indicating a potential upside of 15.62%. Given Medley Management’s stronger consensus rating and higher probable upside, analysts plainly believe Medley Management is more favorable than Virtus Investment Partners.

Profitability

This table compares Medley Management and Virtus Investment Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medley Management 33.42% N/A 15.58%
Virtus Investment Partners 12.13% 11.35% 3.84%

Dividends

Virtus Investment Partners pays an annual dividend of $1.80 per share and has a dividend yield of 1.7%. Medley Management does not pay a dividend. Virtus Investment Partners pays out 35.0% of its earnings in the form of a dividend.

Summary

Virtus Investment Partners beats Medley Management on 7 of the 13 factors compared between the two stocks.

Medley Management Company Profile

Medley Management Inc. is an asset management firm offering yield solutions to retail and institutional investors. The Company operates in the investment management segment. It is focused on credit-related investment strategies, primarily originating senior secured loans to private middle market companies in the United States. The Company generally holds these loans to maturity. Its national direct origination franchise provides capital to the middle market in the United States. The Company has over $4.8 billion of assets under management (AUM) in approximately two business development companies (BDCs), Medley Capital Corporation (MCC) and Sierra Income Corporation (SIC), as well as private investment vehicles. It has over $5 billion of AUM. The Company provides capital to over 300 companies across approximately 35 industries in North America. The Company’s long-dated private funds include MOF I, MOF II and MOF III. Its private funds are managed through partnership structures

Virtus Investment Partners Company Profile

Virtus Investment Partners, Inc. (Virtus) is a provider of investment management and related services to individuals and institutions. The Company provides its products in various forms and through multiple distribution channels. Its retail products include open-end mutual funds, closed-end funds, exchange traded funds, variable insurance funds, undertakings for collective investments in transferable securities (UCITS) and separately managed accounts. Its open-end mutual funds are distributed through intermediaries. Its closed-end funds trade on the New York Stock Exchange. Its variable insurance funds are available as investment options in variable annuities and life insurance products distributed by life insurance companies. Separately managed accounts consists of intermediary programs, sponsored and distributed by unaffiliated brokerage firms, and private client accounts, which are offered to the high net-worth clients of its affiliated managers.

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