Contrasting The Carlyle Group (NASDAQ:CG) and Westwood Holdings Group (NASDAQ:WHG)

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

Profitability

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

Net Margins Return on Equity Return on Assets
The Carlyle Group 12.74% 6.07% 1.30%
Westwood Holdings Group 12.84% 9.40% 8.04%



Institutional & Insider Ownership

44.3% of The Carlyle Group shares are held by institutional investors. Comparatively, 66.6% of Westwood Holdings Group shares are held by institutional investors. 9.7% of Westwood Holdings Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for The Carlyle Group and Westwood Holdings Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Carlyle Group 0 7 5 0 2.42
Westwood Holdings Group 0 0 0 0 N/A

The Carlyle Group presently has a consensus target price of $18.42, suggesting a potential downside of 29.22%. Given The Carlyle Group’s higher possible upside, analysts clearly believe The Carlyle Group is more favorable than Westwood Holdings Group.

Dividends

The Carlyle Group pays an annual dividend of $1.72 per share and has a dividend yield of 6.6%. Westwood Holdings Group pays an annual dividend of $2.88 per share and has a dividend yield of 9.7%. The Carlyle Group pays out 65.4% of its earnings in the form of a dividend. Westwood Holdings Group has raised its dividend for 8 consecutive years. Westwood Holdings Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares The Carlyle Group and Westwood Holdings Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Carlyle Group $2.43 billion 1.19 $116.50 million $2.63 9.89
Westwood Holdings Group $122.30 million 2.17 $26.75 million N/A N/A

The Carlyle Group has higher revenue and earnings than Westwood Holdings Group.

Volatility & Risk

The Carlyle Group has a beta of 1.69, indicating that its stock price is 69% more volatile than the S&P 500. Comparatively, Westwood Holdings Group has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Summary

Westwood Holdings Group beats The Carlyle Group on 10 of the 15 factors compared between the two stocks.

About The Carlyle Group

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).

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.

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