Gamco Investors (NYSE: GBL) and Brookfield Asset Management (NYSE:BAM) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Dividends

Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Brookfield Asset Management pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. Gamco Investors pays out 2.2% of its earnings in the form of a dividend. Brookfield Asset Management pays out 43.4% 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. Gamco Investors has raised its dividend for 5 consecutive years and Brookfield Asset Management has raised its dividend for 5 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Gamco Investors 30.81% -54.62% 53.85%
Brookfield Asset Management 4.87% 2.10% 0.84%

Risk & Volatility

Gamco Investors has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Brookfield Asset Management has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Insider & Institutional Ownership

25.4% of Gamco Investors shares are owned by institutional investors. Comparatively, 52.2% of Brookfield Asset Management shares are owned by institutional investors. 80.0% of Gamco Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Gamco Investors $353.00 million 2.42 $117.12 million $3.68 7.93
Brookfield Asset Management $24.41 billion 1.70 $1.65 billion $1.29 32.52

Brookfield Asset Management has higher revenue and earnings than Gamco Investors. Gamco Investors is trading at a lower price-to-earnings ratio than Brookfield Asset Management, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Gamco Investors and Brookfield Asset Management, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gamco Investors 0 0 0 0 N/A
Brookfield Asset Management 0 0 6 0 3.00

Brookfield Asset Management has a consensus price target of $48.17, suggesting a potential upside of 14.82%. Given Brookfield Asset Management’s higher possible upside, analysts plainly believe Brookfield Asset Management is more favorable than Gamco Investors.

Summary

Brookfield Asset Management beats Gamco Investors on 9 of the 15 factors compared between the two stocks.

Gamco Investors Company Profile

GAMCO Investors, Inc. is a holding company. The Company is a provider of investment advisory services to open and closed-end funds, institutional and private wealth management investors principally in the United States. The Company operates through the investment advisory and asset management business segment. It manages assets on a discretionary basis and invests in securities through various investment styles. Its assets under management are organized into three groups: Institutional and Private Wealth Management; Open and Closed-End Funds, and the GAMCO International SICAV (SICAV). The Company provides advisory services to a range of investors, including corporate retirement plans, foundations, endowments and private wealth clients, and also serves as sub-advisor to third-party investment funds, including registered investment companies. As of December 31, 2016, it had provided advisory services to 21 open-end funds, 15 closed-end funds and one exchange traded managed fund.

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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