PJT Partners (NYSE:PJT) and The Carlyle Group (NASDAQ:CG) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Profitability

This table compares PJT Partners and The Carlyle Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PJT Partners 5.99% 20.97% 13.34%
The Carlyle Group -13.26% 13.74% 2.99%

Dividends

PJT Partners pays an annual dividend of $0.20 per share and has a dividend yield of 0.4%. The Carlyle Group pays an annual dividend of $1.00 per share and has a dividend yield of 4.3%. PJT Partners pays out 8.3% of its earnings in the form of a dividend. The Carlyle Group pays out 58.8% 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. The Carlyle Group has increased its dividend for 1 consecutive years. The Carlyle Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for PJT Partners and The Carlyle Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PJT Partners 0 1 3 0 2.75
The Carlyle Group 1 8 5 0 2.29

PJT Partners presently has a consensus target price of $57.67, indicating a potential upside of 24.01%. The Carlyle Group has a consensus target price of $26.93, indicating a potential upside of 14.69%. Given PJT Partners’ stronger consensus rating and higher probable upside, equities research analysts plainly believe PJT Partners is more favorable than The Carlyle Group.

Volatility & Risk

PJT Partners has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, The Carlyle Group has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500.

Insider and Institutional Ownership

66.6% of PJT Partners shares are owned by institutional investors. Comparatively, 16.1% of The Carlyle Group shares are owned by institutional investors. 9.1% of PJT Partners shares are owned by 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 and Earnings

This table compares PJT Partners and The Carlyle Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PJT Partners $717.64 million 1.56 $63.79 million $2.41 19.29
The Carlyle Group $2.11 billion 3.88 $380.90 million $1.70 13.81

The Carlyle Group has higher revenue and earnings than PJT Partners. The Carlyle Group is trading at a lower price-to-earnings ratio than PJT Partners, indicating that it is currently the more affordable of the two stocks.

Summary

PJT Partners beats The Carlyle Group on 10 of the 17 factors compared between the two stocks.

PJT Partners Company Profile

PJT Partners Inc., an investment bank, provides various strategic advisory, shareholder engagement, restructuring and special situations, and private fund advisory and placement services to corporations, financial sponsors, institutional investors, and governments worldwide. It offers a range of financial advisory and transaction execution capability, including mergers and acquisitions, joint ventures, minority investments, asset swaps, divestitures, takeover defenses, corporate finance advisory, private placements, and distressed sales. The company also advices companies, creditors, and financial sponsors on recapitalizations, reorganizations, exchange offers, debt repurchases, capital raises, and distressed mergers and acquisitions. In addition, it offers private fund advisory and placement services for various investment strategies, including private equity, hedge fund, real estate, and secondary advisory groups. The company was formerly known as Blackstone Advisory Inc. and changed its name to PJT Partners Inc. in March 2015. PJT Partners Inc. is headquartered in New York, New York.

The Carlyle Group Company Profile

The Carlyle Group L.P. is an investment firm specializing in direct and fund of fund investments. Within direct investments, it specializes in management-led/ Leveraged buyouts, privatizations, divestitures, strategic minority equity investments, structured credit, global distressed and corporate opportunities, small and middle market, equity private placements, consolidations and buildups, senior debt, mezzanine and leveraged finance, and venture and growth capital financings, seed/startup, early venture, emerging growth, turnaround, mid venture, late venture, PIPES. The firm invests across four segments which include Corporate Private Equity, Real Assets, Global Market Strategies, and Solutions. The firm typically invests in agribusiness, ecological sector, fintech, airports, parking, Plastics, Rubber, diversified natural resources, minerals, farming, aerospace, defense, automotive, consumer, retail, industrial, infrastructure, energy, power, healthcare, software, software enabled services, semiconductors, communications infrastructure, financial technology, utilities, gaming, systems and related supply chain, electronic systems, systems, oil and gas, processing facilities, power generation assets, technology, systems, real estate, financial services, transportation, business services, telecommunications, media, and logistics sectors. Within the industrial sector, the firm invests in manufacturing, building products, packaging, chemicals, metals and mining, forestry and paper products, and industrial consumables and services. In consumer and retail sectors, it invests in food and beverage, retail, restaurants, consumer products, domestic consumption, consumer services, personal care products, direct marketing, and education. Within aerospace, defense, business services, and government services sectors, it seeks to invest in defense electronics, manufacturing and services, government contracting and services, information technology, distribution companies. In telecommunication and media sectors, it invests in cable TV, directories, publishing, entertainment and content delivery services, wireless infrastructure/services, fixed line networks, satellite services, broadband and Internet, and infrastructure. Within real estate, the firm invests in office, hotel, industrial, retail, for sale residential, student housing, hospitality, multifamily residential, homebuilding and building products, and senior living sectors. The firm seeks to make investments in growing business including those with overleveraged balance sheets. The firm seeks to hold its investments for four to six years. In the healthcare sector, it invests in healthcare services, outsourcing services, companies running clinical trials for pharmaceutical companies, managed care, pharmaceuticals, pharmaceutical related services, healthcare IT, medical, products, and devices. It seeks to invest in companies based in Sub-Saharan focusing on Ghana, Kenya, Mozambique, Botswana, Nigeria, Uganda, West Africa, North Africa and South Africa focusing on Tanzania and Zambia; Asia focusing on Pakistan, India, South East Asia, Indonesia, Philippines, Vietnam, Korea, and Japan; Australia; New Zealand; Europe focusing on France, Italy, Denmark, United Kingdom, Germany, Austria, Belgium, Finland, Iceland, Ireland, Netherlands, Norway, Portugal, Spain, Benelux , Sweden, Switzerland, Hungary, Poland, and Russia; Middle East focusing on Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Turkey, and UAE; North America focusing on United States which further invest in Southeastern United States, Texas, Boston, San Francisco Bay Area and Pacific Northwest; Asia Pacific; Soviet Union, Central-Eastern Europe, and Israel; Nordic region; and South America focusing on Mexico, Argentina, Brazil, Chile, and Peru. The firm seeks to invest in food, financial, and healthcare industries in Western China. In the real estate sector, the firm seeks to invest in various locations across Europe focusing on France and Central Europe, United States, Asia focusing on China, and Latin America. It typically invests between $5 million and $50 million for venture investments and between $20 million and $1 billion for buyouts in companies with enterprise value of between $37.15 million and $1000 million and sales value of $10 million and $500 million. It seeks to invest in companies with market capitalization greater than $50 million. It prefers to take a majority stake. It typically holds its investments for three to five years. Within automotive and transportation sectors, the firm seeks to hold its investments in for four to six years. While investing in Japan, it does not invest in companies with more than 1,000 employees and prefers companies' worth between $100 million and $150 million. The firm originates, structures, and acts as lead equity investor in the transactions. The Carlyle Group L.P. was founded in 1987 and is based in Washington, District of Columbia with additional offices in 20 countries across six continents (North America, South America, Asia, Australia, Europe, and Africa).

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