Comparing T. Rowe Price Group (TROW) & Ares Management L.P. (ARES)
T. Rowe Price Group (NASDAQ: TROW) and Ares Management L.P. (NYSE:ARES) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Insider & Institutional Ownership
73.6% of T. Rowe Price Group shares are held by institutional investors. Comparatively, 14.7% of Ares Management L.P. shares are held by institutional investors. 3.6% of T. Rowe Price Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of current ratings and recommmendations for T. Rowe Price Group and Ares Management L.P., as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|T. Rowe Price Group||2||6||2||0||2.00|
|Ares Management L.P.||0||1||7||0||2.88|
T. Rowe Price Group presently has a consensus target price of $86.56, suggesting a potential downside of 5.63%. Ares Management L.P. has a consensus target price of $21.00, suggesting a potential upside of 12.00%. Given Ares Management L.P.’s stronger consensus rating and higher probable upside, analysts plainly believe Ares Management L.P. is more favorable than T. Rowe Price Group.
This table compares T. Rowe Price Group and Ares Management L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|T. Rowe Price Group||32.64%||24.38%||18.94%|
|Ares Management L.P.||5.86%||40.94%||7.01%|
Risk and Volatility
T. Rowe Price Group has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Ares Management L.P. has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.
T. Rowe Price Group pays an annual dividend of $2.28 per share and has a dividend yield of 2.5%. Ares Management L.P. pays an annual dividend of $1.24 per share and has a dividend yield of 6.6%. T. Rowe Price Group pays out 39.2% of its earnings in the form of a dividend. Ares Management L.P. pays out 169.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ares Management L.P. has increased its dividend for 30 consecutive years. Ares Management L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares T. Rowe Price Group and Ares Management L.P.’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|T. Rowe Price Group||$4.47 billion||4.93||$2.06 billion||$5.82||15.76|
|Ares Management L.P.||$1.47 billion||2.73||$260.09 million||$0.73||25.68|
T. Rowe Price Group has higher revenue and earnings than Ares Management L.P.. T. Rowe Price Group is trading at a lower price-to-earnings ratio than Ares Management L.P., indicating that it is currently the more affordable of the two stocks.
T. Rowe Price Group beats Ares Management L.P. on 9 of the 16 factors compared between the two stocks.
T. Rowe Price Group Company Profile
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.
Ares Management L.P. Company Profile
Ares Management, L.P. is an alternative asset manager. The Company offers its investors a range of investment strategies. It operates through three segments: Credit Group, Private Equity Group and Real Estate Group. The Credit Group segment manages credit strategies across the non-investment grade credit universe in the United States and Europe. It offers a range of credit strategies across the liquid and illiquid spectrum, including syndicated loans, high yield bonds, credit opportunities, structured credit investments and the United States and European direct lending. The Credit Group provides solutions for traditional fixed income investors. The Private Equity Group segment categorizes its investment strategies as corporate private equity, the United States power and energy infrastructure and special situations. The Real Estate Group segment manages public and private equity and debt strategies. The Real Estate Group manages both a value-add strategy and an opportunistic strategy.
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