Legg Mason (NYSE:LM) and Moelis & Co (NYSE:MC) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.
This table compares Legg Mason and Moelis & Co’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Moelis & Co||8.14%||50.56%||23.86%|
Volatility and Risk
Legg Mason has a beta of 1.88, suggesting that its stock price is 88% more volatile than the S&P 500. Comparatively, Moelis & Co has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500.
Institutional & Insider Ownership
86.6% of Legg Mason shares are owned by institutional investors. Comparatively, 69.3% of Moelis & Co shares are owned by institutional investors. 4.3% of Legg Mason shares are owned by company insiders. Comparatively, 29.9% of Moelis & Co shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Legg Mason pays an annual dividend of $1.36 per share and has a dividend yield of 4.7%. Moelis & Co pays an annual dividend of $1.88 per share and has a dividend yield of 3.7%. Legg Mason pays out 36.6% of its earnings in the form of a dividend. Moelis & Co pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Legg Mason has raised its dividend for 8 consecutive years and Moelis & Co has raised its dividend for 3 consecutive years. Legg Mason is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares Legg Mason and Moelis & Co’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Legg Mason||$3.14 billion||0.78||$285.07 million||$3.72||7.75|
|Moelis & Co||$684.61 million||4.16||$29.40 million||$2.29||22.12|
Legg Mason has higher revenue and earnings than Moelis & Co. Legg Mason is trading at a lower price-to-earnings ratio than Moelis & Co, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and price targets for Legg Mason and Moelis & Co, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Moelis & Co||0||2||3||0||2.60|
Legg Mason currently has a consensus price target of $43.56, indicating a potential upside of 51.08%. Moelis & Co has a consensus price target of $63.20, indicating a potential upside of 24.78%. Given Legg Mason’s higher probable upside, equities research analysts plainly believe Legg Mason is more favorable than Moelis & Co.
Legg Mason beats Moelis & Co on 10 of the 16 factors compared between the two stocks.
Legg Mason Company Profile
Legg Mason, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides investment management and related services to company-sponsored mutual funds and other investment vehicles including pension funds, foundations, endowments, sovereign wealth funds, insurance companies, private banks, family offices, individuals, as well as to global, institutional, and retail clients. It launches and manages equity, fixed income, and multi-asset customized portfolios through its subsidiaries. The firm also launches and manages mutual funds and exchange traded funds for its clients through its subsidiaries. It invests in private and public equity, fixed income, and multi asset markets across the globe through its subsidiaries. Through its subsidiaries, the firm also invests in alternative markets. It also employs a combination of fundamental and quantitative research to make its investments through its subsidiaries. Legg Mason, Inc. was founded in 1899 and is based in Baltimore, Maryland.
Moelis & Co Company Profile
Moelis & Company is a global investment bank. The firm provides services relating to mergers & acquisitions, recapitalization & restructuring, capital markets and financial institution advisory; private funds; shareholder defense and strategic alliances. The firm's expertise is into global energy; IPO advisory; technology, media, telecommunication sectors. The firm serves clients from 19 geographic locations in the Americas, Europe, the Middle East, Asia and Australia. The firm supports clients through all phases of the business cycle. Moelis & Company was founded in 2007 and is headquartered in New York, New York with additional offices in the United States; Europe; Asia; Australia and Middle East
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