Garrison Capital (NASDAQ: GARS) and Brookfield Asset Management (NYSE:BAM) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Garrison Capital and Brookfield Asset Management, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Garrison Capital 0 5 1 0 2.17
Brookfield Asset Management 0 1 6 0 2.86

Garrison Capital currently has a consensus target price of $10.17, suggesting a potential upside of 19.47%. Brookfield Asset Management has a consensus target price of $44.50, suggesting a potential upside of 5.45%. Given Garrison Capital’s higher possible upside, analysts plainly believe Garrison Capital is more favorable than Brookfield Asset Management.

Profitability

This table compares Garrison Capital and Brookfield Asset Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Garrison Capital -0.38% 8.33% 3.97%
Brookfield Asset Management 4.87% 2.10% 0.84%

Risk and Volatility

Garrison Capital has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500. Comparatively, Brookfield Asset Management has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Dividends

Garrison Capital pays an annual dividend of $1.12 per share and has a dividend yield of 13.2%. Brookfield Asset Management pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. Brookfield Asset Management pays out 43.8% of its earnings in the form of a dividend. Garrison Capital has increased its dividend for 5 consecutive years. Garrison Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

22.0% of Garrison Capital shares are held by institutional investors. Comparatively, 53.7% of Brookfield Asset Management shares are held by institutional investors. 5.8% of Garrison Capital shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Garrison Capital and Brookfield Asset Management’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Garrison Capital N/A N/A N/A N/A N/A
Brookfield Asset Management $30.02 billion 1.35 $8.47 billion $1.28 32.97

Brookfield Asset Management has higher revenue and earnings than Garrison Capital.

Garrison Capital Company Profile

Garrison Capital Inc. is a managed, closed-end, non-diversified management investment company. The Company’s investment objective is to generate current income and capital appreciation by making investments primarily in debt securities and loans of the United States-based middle-market companies, which it defines as those having annual earnings before interest, taxes and depreciation, or EBITDA, of certain amount. It invests or provides direct lending in first lien senior secured loans, second lien senior secured loans, one-stop senior secured loans or unitranche loans, subordinated or mezzanine loans, unsecured consumer loans and to a lesser extent, selected equity co-investments in middle-market companies. The Company intends to generate risk-adjusted net returns by assembling a portfolio of investments. The Company’s investment advisor is Garrison Capital Advisers LLC.

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.

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