Critical Review: Westwood Holdings Group (NYSE:WHG) and Cohen & Steers (NYSE:CNS)

Westwood Holdings Group (NYSE:WHG) and Cohen & Steers (NYSE:CNS) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, dividends, valuation, institutional ownership, profitability, risk and analyst recommendations.

Dividends

Westwood Holdings Group pays an annual dividend of $0.60 per share and has a dividend yield of 3.2%. Cohen & Steers pays an annual dividend of $2.68 per share and has a dividend yield of 3.7%. Westwood Holdings Group pays out 68.2% of its earnings in the form of a dividend. Cohen & Steers pays out 82.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cohen & Steers has increased its dividend for 16 consecutive years. Cohen & Steers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Westwood Holdings Group and Cohen & Steers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westwood Holdings Group	0	0	1	0	3.00
Cohen & Steers	1	1	1	0	2.00

Cohen & Steers has a consensus target price of $88.00, suggesting a potential upside of 20.20%. Given Cohen & Steers’ higher probable upside, analysts plainly believe Cohen & Steers is more favorable than Westwood Holdings Group.

Insider and Institutional Ownership

56.6% of Westwood Holdings Group shares are owned by institutional investors. Comparatively, 51.5% of Cohen & Steers shares are owned by institutional investors. 17.4% of Westwood Holdings Group shares are owned by company insiders. Comparatively, 45.4% of Cohen & Steers shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Westwood Holdings Group has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Cohen & Steers has a beta of 1.19, meaning that its stock price is 19% more volatile than the S&P 500.

Profitability

This table compares Westwood Holdings Group and Cohen & Steers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westwood Holdings Group	7.73%	8.10%	6.59%
Cohen & Steers	28.16%	26.90%	25.44%

Earnings and Valuation

This table compares Westwood Holdings Group and Cohen & Steers”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westwood Holdings Group	$97.76 million	1.81	$7.06 million	$0.88	21.16
Cohen & Steers	$556.12 million	6.77	$153.22 million	$3.26	22.46

Cohen & Steers has higher revenue and earnings than Westwood Holdings Group. Westwood Holdings Group is trading at a lower price-to-earnings ratio than Cohen & Steers, indicating that it is currently the more affordable of the two stocks.

Summary

Cohen & Steers beats Westwood Holdings Group on 13 of the 16 factors compared between the two stocks.

About Westwood Holdings Group

Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.

About Cohen & Steers

Cohen & Steers, Inc. is a holding company, which operates as an investment manager specializing in liquid real assets, which include real estate securities, listed infrastructure, commodities, natural resource equities, preferred securities, and other income solutions. It manages investment vehicles, such as institutional accounts, open-end funds and closed-end funds. The company was founded by Martin Cohen and Robert Hamilton Steers in 1986 and is headquartered in New York, NY.