Fifth Street Asset Management (OTCMKTS: FSAM) and Calamos Asset Management (NASDAQ:CLMS) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, risk, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

8.6% of Fifth Street Asset Management shares are held by institutional investors. Comparatively, 56.5% of Calamos Asset Management shares are held by institutional investors. 85.4% of Fifth Street Asset Management shares are held by insiders. Comparatively, 20.4% of Calamos Asset Management shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Fifth Street Asset Management and Calamos Asset Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fifth Street Asset Management -20.92% -626.41% -2.71%
Calamos Asset Management 58.85% 2.51% 13.51%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Fifth Street Asset Management and Calamos Asset Management, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fifth Street Asset Management 0 0 0 0 N/A
Calamos Asset Management 0 0 0 0 N/A

Earnings & Valuation

This table compares Fifth Street Asset Management and Calamos Asset Management’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fifth Street Asset Management $82.55 million 0.73 -$1.53 million ($0.14) -8.46
Calamos Asset Management N/A N/A N/A $0.05 165.60

Calamos Asset Management has lower revenue, but higher earnings than Fifth Street Asset Management. Fifth Street Asset Management is trading at a lower price-to-earnings ratio than Calamos Asset Management, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Fifth Street Asset Management has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500. Comparatively, Calamos Asset Management has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.

Dividends

Fifth Street Asset Management pays an annual dividend of $0.13 per share and has a dividend yield of 11.0%. Calamos Asset Management pays an annual dividend of $0.60 per share and has a dividend yield of 7.2%. Fifth Street Asset Management pays out -92.9% of its earnings in the form of a dividend. Calamos Asset Management pays out 1,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fifth Street Asset Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Calamos Asset Management beats Fifth Street Asset Management on 7 of the 11 factors compared between the two stocks.

About Fifth Street Asset Management

Fifth Street Asset Management Inc. is an alternative asset manager. The Company provides asset management services to its investment funds (the Fifth Street Funds or the funds), which consist of Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR), both publicly-traded business development companies (together, the BDCs). Its segment provides asset management services to the Fifth Street Funds. The Company conducts all of its operations through its subsidiaries, Fifth Street Management LLC (FSM), Fifth Street CLO Management LLC (CLO Management) and FSCO GP LLC (FSCO GP). The funds, managed by the Company, provide financing solutions to small and mid-sized companies across their capital structures, mainly in connection with investments by private equity sponsors. It provides credit solutions across the capital structure, including one-stop financing, unitranche debt, senior secured debt, mezzanine debt, equity co-investments and venture debt financing.

About Calamos Asset Management

Calamos Asset Management, Inc. is a holding company. The Company is the manager of Calamos Investments LLC, which owns and manages its operating companies. The Company provides investment advisory services to individuals and institutional investors through investment products that include open-end and closed-end funds (Funds), an exchange traded fund, separate accounts, offshore funds and partnerships. The subsidiaries through which the Company provides these services include Calamos Advisors LLC (CAL), an investment advisor; Calamos Financial Services LLC (CFS), a broker-dealer; Calamos Wealth Management LLC, an investment advisor, and Calamos Investments LLP, a United Kingdom-based investment advisor, and a distributor of the offshore funds and Company products.

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