Westwood Holdings Group (NYSE:WHG) and Blue Owl Capital (NYSE:OWL) Critical Review

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

Analyst Recommendations

This is a breakdown of recent ratings for Westwood Holdings Group and Blue Owl Capital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westwood Holdings Group	0	0	0	0	N/A
Blue Owl Capital	0	3	9	0	2.75

Blue Owl Capital has a consensus target price of $20.27, indicating a potential upside of 14.78%. Given Blue Owl Capital’s higher probable upside, analysts clearly believe Blue Owl Capital is more favorable than Westwood Holdings Group.

Dividends

Westwood Holdings Group pays an annual dividend of $0.60 per share and has a dividend yield of 5.0%. Blue Owl Capital pays an annual dividend of $0.72 per share and has a dividend yield of 4.1%. Westwood Holdings Group pays out 44.1% of its earnings in the form of a dividend. Blue Owl Capital pays out 600.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westwood Holdings Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Westwood Holdings Group and Blue Owl Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westwood Holdings Group	13.39%	12.53%	10.10%
Blue Owl Capital	3.84%	18.15%	10.86%

Volatility & Risk

Westwood Holdings Group has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Blue Owl Capital has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Earnings & Valuation

This table compares Westwood Holdings Group and Blue Owl Capital’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westwood Holdings Group	$89.78 million	1.25	$10.57 million	$1.36	8.85
Blue Owl Capital	$1.73 billion	14.57	$54.34 million	$0.12	147.17

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

Institutional & Insider Ownership

56.6% of Westwood Holdings Group shares are held by institutional investors. Comparatively, 35.9% of Blue Owl Capital shares are held by institutional investors. 11.4% of Westwood Holdings Group shares are held by company insiders. Comparatively, 33.5% of Blue Owl Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Blue Owl Capital beats Westwood Holdings Group on 9 of the 15 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 Blue Owl Capital

Blue Owl Capital Inc. operates as an asset manager in the United States. The company offers permanent capital base solutions that enables it to offer holistic framework of capital solutions to middle market companies, large alternative asset managers, and corporate real estate owners and tenants. It also provides direct lending products that offer private credit products comprising diversified, technology, first lien, and opportunistic lending to middle-market companies; liquid credit; GP strategic capital products, which offers capital solutions, including GP minority stakes, GP debt financing, and professional sports minority stakes; and real estate products that focuses on acquiring triple net lease real estate by investment grade or creditworthy tenants. It offers its solutions through permanent capital vehicles, as well as long-dated private funds. Blue Owl Capital Inc. is headquartered in New York, New York.