Critical Survey: Affiliated Managers Group (AMG) and Invesco (IVZ)

Affiliated Managers Group (NYSE:AMG) and Invesco (NYSE:IVZ) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, risk, dividends and analyst recommendations.

Institutional and Insider Ownership

98.2% of Affiliated Managers Group shares are held by institutional investors. Comparatively, 81.6% of Invesco shares are held by institutional investors. 0.9% of Affiliated Managers Group shares are held by insiders. Comparatively, 1.9% of Invesco shares are held by 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.



Analyst Recommendations

This is a summary of current ratings and price targets for Affiliated Managers Group and Invesco, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Affiliated Managers Group 0 4 3 0 2.43
Invesco 0 9 2 0 2.18

Affiliated Managers Group presently has a consensus price target of $132.12, suggesting a potential upside of 16.75%. Invesco has a consensus price target of $22.11, suggesting a potential upside of 2.65%. Given Affiliated Managers Group’s stronger consensus rating and higher probable upside, equities analysts plainly believe Affiliated Managers Group is more favorable than Invesco.

Profitability

This table compares Affiliated Managers Group and Invesco’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Affiliated Managers Group 10.24% 18.11% 9.23%
Invesco 16.61% 10.96% 3.14%

Valuation & Earnings

This table compares Affiliated Managers Group and Invesco’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Affiliated Managers Group $2.38 billion 2.44 $243.60 million $14.50 7.80
Invesco $5.31 billion 1.61 $882.80 million $2.43 8.86

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

Dividends

Affiliated Managers Group pays an annual dividend of $1.28 per share and has a dividend yield of 1.1%. Invesco pays an annual dividend of $1.20 per share and has a dividend yield of 5.6%. Affiliated Managers Group pays out 8.8% of its earnings in the form of a dividend. Invesco pays out 49.4% 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. Invesco has raised its dividend for 10 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Affiliated Managers Group has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, Invesco has a beta of 1.53, meaning that its stock price is 53% more volatile than the S&P 500.

Summary

Affiliated Managers Group beats Invesco on 9 of the 17 factors compared between the two stocks.

Affiliated Managers Group Company Profile

Affiliated Managers Group, Inc., through its affiliates, operates as an asset management company providing investment management services to mutual funds, institutional clients, and high net worth individuals in the United States. It provides advisory or subadvisory services to mutual funds. These funds are distributed to retail and institutional clients directly and through intermediaries, including independent investment advisors, retirement plan sponsors, broker-dealers, major fund marketplaces, and bank trust departments. The company also offers investment products in various investment styles in the institutional distribution channel, including small, small/mid, mid, and large capitalization value and growth equity, and emerging markets. In addition, it offers quantitative, alternative, and fixed income products, and manages assets for foundations and endowments, defined benefit, and defined contribution plans for corporations and municipalities. Affiliated Managers Group provides investment management or customized investment counseling and fiduciary services. The company was formed as a corporation under the laws of Delaware in 1993. Affiliated Managers Group is based in Prides Crossing, Massachusetts.

Invesco Company Profile

Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in December 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

Receive News & Ratings for Affiliated Managers Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Affiliated Managers Group and related companies with MarketBeat.com's FREE daily email newsletter.