The Blackstone Group L.P. (NYSE: BX) and Financial Engines (NASDAQ:FNGN) are both mid-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Valuation and Earnings

This table compares The Blackstone Group L.P. and Financial Engines’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Blackstone Group L.P. $6.33 billion 3.41 $1.44 billion $2.22 14.97
Financial Engines $458.22 million 5.04 $84.14 million $0.64 57.19

The Blackstone Group L.P. has higher revenue and earnings than Financial Engines. The Blackstone Group L.P. is trading at a lower price-to-earnings ratio than Financial Engines, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

46.6% of The Blackstone Group L.P. shares are held by institutional investors. 1.0% of The Blackstone Group L.P. shares are held by company insiders. Comparatively, 16.0% of Financial Engines shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares The Blackstone Group L.P. and Financial Engines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Blackstone Group L.P. 22.88% 18.97% 8.76%
Financial Engines 8.98% 7.31% 6.64%

Dividends

The Blackstone Group L.P. pays an annual dividend of $2.16 per share and has a dividend yield of 6.5%. Financial Engines pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. The Blackstone Group L.P. pays out 97.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Financial Engines pays out 43.8% of its earnings in the form of a dividend. Financial Engines has increased its dividend for 4 consecutive years.

Volatility and Risk

The Blackstone Group L.P. has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, Financial Engines has a beta of 2.2, meaning that its stock price is 120% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for The Blackstone Group L.P. and Financial Engines, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Blackstone Group L.P. 0 1 8 0 2.89
Financial Engines 0 0 5 0 3.00

The Blackstone Group L.P. currently has a consensus target price of $37.78, suggesting a potential upside of 13.69%. Financial Engines has a consensus target price of $43.00, suggesting a potential upside of 17.49%. Given Financial Engines’ stronger consensus rating and higher probable upside, analysts clearly believe Financial Engines is more favorable than The Blackstone Group L.P..

Summary

The Blackstone Group L.P. beats Financial Engines on 9 of the 17 factors compared between the two stocks.

The Blackstone Group L.P. Company Profile

The Blackstone Group L.P. is a global alternative asset manager. The Company’s alternative asset management businesses include investment vehicles focused on private equity, non-investment grade credit, secondary private equity funds of funds and multi-asset class strategies. It operates through four segments: Private Equity, Real Estate, Hedge Fund Solutions and Credit. The Private Equity segment includes its corporate private equity business, which consists of its corporate private equity funds, Blackstone Capital Partners (BCP) funds, its sector-focused corporate private equity funds, including its energy-focused funds, Blackstone Energy Partners (BEP) funds and its core private equity fund. The Blackstone Real Estate Partners funds target a range of opportunistic real estate and real estate related investments. The Hedge Fund Solutions segment consists of Blackstone Alternative Asset Management (BAAM). The Credit segment consists principally of GSO Capital Partners LP (GSO).

Financial Engines Company Profile

Financial Engines, Inc. is a provider of independent, technology-enabled financial advisory services, discretionary portfolio management, personalized investment advice, financial and retirement income planning, and financial education and guidance. The Company offers personalized plans for saving, investing, and generating retirement income, as well as by providing assessments of retirement income needs and readiness. The Company’s advice and planning services cover employer-sponsored defined contribution (DC) accounts (401(k), 457, and 403(b) plans), individual retirement account (IRA) accounts, and taxable accounts. For individuals, the Company provides discretionary portfolio management, personalized investment advice, financial and retirement income planning, financial education and guidance. The Company maintains two types of relationships with individuals: DC plan participants in the workplace and Individuals outside the workplace.

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