Critical Review: GCM Grosvenor (NASDAQ:GCMG) versus Brookfield (NYSE:BN)

GCM Grosvenor (NASDAQ:GCMG) and Brookfield (NYSE:BN) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for GCM Grosvenor and Brookfield, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GCM Grosvenor	0	1	4	0	2.80
Brookfield	0	2	10	1	2.92

GCM Grosvenor currently has a consensus target price of $15.00, indicating a potential upside of 19.43%. Brookfield has a consensus target price of $57.40, indicating a potential upside of 56.90%. Given Brookfield’s stronger consensus rating and higher probable upside, analysts clearly believe Brookfield is more favorable than GCM Grosvenor.

Valuation and Earnings

This table compares GCM Grosvenor and Brookfield”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GCM Grosvenor	$557.57 million	4.57	$45.37 million	$0.52	24.15
Brookfield	$75.10 billion	1.19	$1.31 billion	$0.55	66.51

Brookfield has higher revenue and earnings than GCM Grosvenor. GCM Grosvenor is trading at a lower price-to-earnings ratio than Brookfield, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

GCM Grosvenor has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500. Comparatively, Brookfield has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500.

Dividends

GCM Grosvenor pays an annual dividend of $0.48 per share and has a dividend yield of 3.8%. Brookfield pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. GCM Grosvenor pays out 92.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brookfield pays out 50.9% of its earnings in the form of a dividend. Brookfield has increased its dividend for 2 consecutive years.

Insider and Institutional Ownership

100.0% of GCM Grosvenor shares are owned by institutional investors. Comparatively, 61.6% of Brookfield shares are owned by institutional investors. 70.7% of GCM Grosvenor shares are owned by company insiders. Comparatively, 11.0% of Brookfield shares are owned 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.

Profitability

This table compares GCM Grosvenor and Brookfield’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GCM Grosvenor	7.79%	142.74%	18.73%
Brookfield	1.85%	3.93%	1.22%

Summary

Brookfield beats GCM Grosvenor on 11 of the 18 factors compared between the two stocks.

About GCM Grosvenor

GCM Grosvenor Inc. is global alternative asset management solutions provider. The firm primarily provides its services to pooled investment vehicles. It also provides its services to investment companies, high net worth individuals, pension and profit sharing plans and state or municipal government entities. The firm invests in equity and alternative investment markets of the United States and internationally. The firm invests in multi-strategy, credit-focused, equity-focused, macro-focused, commodity-focused, and other specialty portfolios. It focuses in hedge fund asset classes, private equity, real estate, and/or infrastructure, credit and absolute return strategies. It also focuses in primary fund investments, secondary fund investments, and co-investments with a focus on buyout, distressed debt, mezzanine, venture capital/growth equity investments. The firm seeks to do seed investments in small, emerging, and diverse private equity firms. The firm seeks to make regionally-focused investments in middle-market buyout. It prefers to invest in aerospace and defense, advanced electronics, information technology, biosciences, and advanced materials. It focuses on Ohio and the Midwest region. The firm employs fundamental and quantitative analysis. GCM Grosvenor Inc. was founded in 1971 and is based in Chicago, Illinois with additional offices in North America, Asia, Australia and Europe.

About Brookfield

Brookfield Corporation is an alternative asset manager and REIT/Real Estate Investment Manager firm focuses on real estate, renewable power, infrastructure and venture capital and private equity assets. It manages a range of public and private investment products and services for institutional and retail clients. It typically makes investments in sizeable, premier assets across geographies and asset classes. It invests both its own capital as well as capital from other investors. Within private equity and venture capital, it focuses on acquisition, early ventures, control buyouts and financially distressed, buyouts and corporate carve-outs, recapitalizations, convertible, senior and mezzanine financings, operational and capital structure restructuring, strategic re-direction, turnaround, and under-performing midmarket companies. It invests in both public debt and equity markets. It invests in private equity sectors with focus on Business Services include infrastructure, healthcare, road fuel distribution and marketing, construction and real estate; Industrials include manufacturers of automotive batteries, graphite electrodes, returnable plastic packaging, and sanitation management and development; and Residential/ infrastructure services. It targets companies which likely possess underlying real assets, primarily in sectors such as industrial products, building materials, metals, mining, homebuilding, oil and gas, paper and packaging, manufacturing and forest product sectors. It invests globally with focus on North America including Brazil, the United States, Canada; Europe; and Australia; and Asia-Pacific. The firm considers equity investments in the range of $2 million to $500 million. It has a four-year investment period and a 10-year term with two one-year extensions. The firm prefers to take minority stake and majority stake. Brookfield Corporation was founded in 1997 and based in Toronto, Canada with additional offices across Northern America; South America; Europe; Middle East and Asia.