Analyzing KKR & Co. L.P. (KKR) & T. Rowe Price Group (TROW)
KKR & Co. L.P. (NYSE: KKR) and T. Rowe Price Group (NASDAQ:TROW) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, analyst recommendations, risk, institutional ownership, profitability and earnings.
Risk & Volatility
KKR & Co. L.P. has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500. Comparatively, T. Rowe Price Group has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.
KKR & Co. L.P. pays an annual dividend of $0.68 per share and has a dividend yield of 3.4%. T. Rowe Price Group pays an annual dividend of $2.28 per share and has a dividend yield of 2.5%. KKR & Co. L.P. pays out 28.2% of its earnings in the form of a dividend. T. Rowe Price Group pays out 39.2% 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. KKR & Co. L.P. has increased its dividend for 30 consecutive years. KKR & Co. L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares KKR & Co. L.P. and T. Rowe Price Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|KKR & Co. L.P.||42.48%||11.45%||4.79%|
|T. Rowe Price Group||32.64%||24.38%||18.94%|
Earnings and Valuation
This table compares KKR & Co. L.P. and T. Rowe Price Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|KKR & Co. L.P.||$5.31 billion||1.79||$1.13 billion||$2.41||8.39|
|T. Rowe Price Group||$4.47 billion||4.88||$2.06 billion||$5.82||15.58|
T. Rowe Price Group has higher revenue, but lower earnings than KKR & Co. L.P.. KKR & Co. L.P. is trading at a lower price-to-earnings ratio than T. Rowe Price Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for KKR & Co. L.P. and T. Rowe Price Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|KKR & Co. L.P.||0||3||6||0||2.67|
|T. Rowe Price Group||3||6||2||0||1.91|
KKR & Co. L.P. currently has a consensus target price of $21.33, indicating a potential upside of 5.45%. T. Rowe Price Group has a consensus target price of $84.11, indicating a potential downside of 7.24%. Given KKR & Co. L.P.’s stronger consensus rating and higher possible upside, equities research analysts clearly believe KKR & Co. L.P. is more favorable than T. Rowe Price Group.
Insider & Institutional Ownership
65.2% of KKR & Co. L.P. shares are owned by institutional investors. Comparatively, 73.6% of T. Rowe Price Group shares are owned by institutional investors. 3.6% of T. Rowe Price Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
KKR & Co. L.P. beats T. Rowe Price Group on 9 of the 17 factors compared between the two stocks.
About KKR & Co. L.P.
KKR & CO. L.P. (KKR) is a global investment firm that manages investments across multiple asset classes, including private equity, energy, infrastructure, real estate, credit and hedge funds. The Company’s business offers a range of investment management services to its fund investors, and provides capital markets services to its firm, its portfolio companies and third parties. The Company conducts its business with offices across the world, providing it with a global platform for sourcing transactions, raising capital and carrying out capital markets activities. The Company operates through four segments: Private Markets, Public Markets, Capital Markets and Principal Activities. It operates and reports its combined credit and hedge funds businesses through the Public Markets segment. The Capital Markets segment consists primarily of its global capital markets business. Through its Principal Activities segment, the Company manages the firm’s assets and deploys capital.
About T. Rowe Price Group
T. Rowe Price Group, Inc. is a financial services holding company. The Company provides global investment management services through its subsidiaries to investors across the world. The Company provides an array of Company sponsored the United States mutual funds, other sponsored pooled investment vehicles, sub advisory services, separate account management, recordkeeping, and related services to individuals, advisors, institutions, financial intermediaries and retirement plan sponsors. The Company distributes its products in countries located within three geographical regions: North America, Europe Middle East and Africa (EMEA), and Asia Pacific (APAC). It also offers specialized advisory services, including management of stable value investment contracts and a distribution management service for the disposition of equity securities its clients receive from third-party venture capital investment pools. As of December 31, 2016, it serviced clients in 45 countries across the world.
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