Apollo Global Management LLC Class A (NYSE: APO) and Pzena Investment Management (NYSE:PZN) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Apollo Global Management LLC Class A and Pzena Investment Management, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apollo Global Management LLC Class A 0 2 9 0 2.82
Pzena Investment Management 0 0 0 0 N/A

Apollo Global Management LLC Class A currently has a consensus target price of $36.82, indicating a potential upside of 15.89%. Given Apollo Global Management LLC Class A’s higher possible upside, equities analysts clearly believe Apollo Global Management LLC Class A is more favorable than Pzena Investment Management.

Valuation & Earnings

This table compares Apollo Global Management LLC Class A and Pzena Investment Management’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apollo Global Management LLC Class A $2.61 billion 2.45 $629.10 million $3.57 8.90
Pzena Investment Management $141.29 million 4.84 $6.90 million $0.63 15.56

Apollo Global Management LLC Class A has higher revenue and earnings than Pzena Investment Management. Apollo Global Management LLC Class A is trading at a lower price-to-earnings ratio than Pzena Investment Management, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

70.0% of Apollo Global Management LLC Class A shares are held by institutional investors. Comparatively, 17.5% of Pzena Investment Management shares are held by institutional investors. 4.1% of Apollo Global Management LLC Class A shares are held by insiders. Comparatively, 50.5% of Pzena Investment Management shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Apollo Global Management LLC Class A pays an annual dividend of $1.52 per share and has a dividend yield of 4.8%. Pzena Investment Management pays an annual dividend of $0.12 per share and has a dividend yield of 1.2%. Apollo Global Management LLC Class A pays out 42.6% of its earnings in the form of a dividend. Pzena Investment Management pays out 19.0% 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.

Profitability

This table compares Apollo Global Management LLC Class A and Pzena Investment Management’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apollo Global Management LLC Class A 19.52% 44.70% 15.56%
Pzena Investment Management 5.45% 14.10% 7.55%

Risk and Volatility

Apollo Global Management LLC Class A has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500. Comparatively, Pzena Investment Management has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500.

Summary

Apollo Global Management LLC Class A beats Pzena Investment Management on 10 of the 15 factors compared between the two stocks.

About Apollo Global Management LLC Class A

Apollo Global Management, LLC is a publicly owned investment manager. The firm primarily provides its services to endowment and sovereign wealth funds, as well as other institutional and individual investors. It manages client focused portfolios. The firm launches and manages hedge funds for its clients. It also manages real estate funds and private equity funds for its clients. The firm invests in the fixed income and alternative investment markets across the globe. Its alternative investments include investment in private equity and real estate markets. The firm's private equity investments include traditional buyouts, recapitalization, distressed buyouts and debt investments in real estate, corporate partner buyouts, distressed asset, corporate carve-outs, turnaround, bridge, corporate restructuring, special situation, acquisition, and industry consolidation transactions. Its fixed income investments include income-oriented senior loans, bonds, collateralized loan obligations, structured credit, opportunistic credit, non-performing loans, distressed debt, mezzanine debt, and value oriented fixed income securities. The firm seeks to invest in chemicals, commodities, consumer and retail, oil and gas, metals, mining, agriculture, commodities, distribution and transportation, financial and business services, manufacturing and industrial, media distribution, cable, entertainment and leisure, telecom, technology, natural resources, energy, packaging and materials, and satellite and wireless industries. It seeks to invest in companies based in across North America with a focus on United States, and Europe. The firm also makes investments outside North America, primarily in Western Europe and Asia. It employs a combination of contrarian, value, and distressed strategies to make its investments. The firm seeks to make investments in the range of $10 million and $1.5 billion. The firm conducts an in-house research to create its investment portfolio. It seeks to acquire minority and majority positions in its portfolio companies. Apollo Global Management, LLC was founded in 1990 and is headquartered in New York City, with additional offices in New York City; Bethesda, Maryland; Chicago, Illinois; Los Angeles, California; Purchase, New York; Houston, Texas; London, United Kingdom; Frankfurt, Germany; Central, Hong Kong; Singapore; and Luxembourg.

About Pzena Investment Management

Pzena Investment Management, Inc. is a publicly owned investment manager. The firm manages equity mutual funds for its clients. It invests in the public equity markets. Pzena Investment Management, Inc. was founded in 2007 and is based in New York City with additional offices in Melbourne, Australia and London, United Kingdom.

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