Critical Comparison: T. Rowe Price Group (TROW) and AllianceBernstein Holding L.P. (AB)
T. Rowe Price Group (NASDAQ: TROW) and AllianceBernstein Holding L.P. (NYSE:AB) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.
This is a summary of current recommendations for T. Rowe Price Group and AllianceBernstein Holding L.P., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|T. Rowe Price Group||3||6||2||0||1.91|
|AllianceBernstein Holding L.P.||0||2||3||0||2.60|
T. Rowe Price Group presently has a consensus price target of $84.11, indicating a potential downside of 7.21%. AllianceBernstein Holding L.P. has a consensus price target of $26.33, indicating a potential upside of 8.37%. Given AllianceBernstein Holding L.P.’s stronger consensus rating and higher possible upside, analysts clearly believe AllianceBernstein Holding L.P. is more favorable than T. Rowe Price Group.
T. Rowe Price Group pays an annual dividend of $2.28 per share and has a dividend yield of 2.5%. AllianceBernstein Holding L.P. pays an annual dividend of $1.96 per share and has a dividend yield of 8.1%. T. Rowe Price Group pays out 39.2% of its earnings in the form of a dividend. AllianceBernstein Holding L.P. pays out 89.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. T. Rowe Price Group has increased its dividend for 30 consecutive years.
Institutional & Insider Ownership
73.6% of T. Rowe Price Group shares are held by institutional investors. Comparatively, 19.4% of AllianceBernstein Holding L.P. shares are held by institutional investors. 3.6% of T. Rowe Price Group shares are held by insiders. Comparatively, 2.7% of AllianceBernstein Holding L.P. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This table compares T. Rowe Price Group and AllianceBernstein Holding L.P.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|T. Rowe Price Group||32.64%||24.38%||18.94%|
|AllianceBernstein Holding L.P.||6.74%||13.28%||13.28%|
Valuation & Earnings
This table compares T. Rowe Price Group and AllianceBernstein Holding L.P.’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|T. Rowe Price Group||$4.47 billion||4.87||$2.06 billion||$5.82||15.58|
|AllianceBernstein Holding L.P.||$232.17 million||9.79||$203.84 million||$2.18||11.15|
T. Rowe Price Group has higher revenue and earnings than AllianceBernstein Holding L.P.. AllianceBernstein Holding L.P. is trading at a lower price-to-earnings ratio than T. Rowe Price Group, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
T. Rowe Price Group has a beta of 1.24, suggesting that its stock price is 24% more volatile than the S&P 500. Comparatively, AllianceBernstein Holding L.P. has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500.
T. Rowe Price Group beats AllianceBernstein Holding L.P. on 11 of the 17 factors compared between the two stocks.
T. Rowe Price Group Company Profile
T. Rowe Price Group, Inc. is a financial services holding company. The Company provides global investment management services through its subsidiaries to investors across the world. The Company provides an array of Company sponsored the United States mutual funds, other sponsored pooled investment vehicles, sub advisory services, separate account management, recordkeeping, and related services to individuals, advisors, institutions, financial intermediaries and retirement plan sponsors. The Company distributes its products in countries located within three geographical regions: North America, Europe Middle East and Africa (EMEA), and Asia Pacific (APAC). It also offers specialized advisory services, including management of stable value investment contracts and a distribution management service for the disposition of equity securities its clients receive from third-party venture capital investment pools. As of December 31, 2016, it serviced clients in 45 countries across the world.
AllianceBernstein Holding L.P. Company Profile
AllianceBernstein Holding L.P. is engaged in providing research, investment management and related services to a range of clients through its three buy-side distribution channels: Institutions, Retail and Private Wealth Management, and its sell-side business, Bernstein Research Services. The Company offers a range of investment services, including equity strategies, with global and regional portfolios across capitalization ranges and investment strategies, including value, growth and equities; traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies; passive management, including index and enhanced index strategies; alternative investments, including hedge funds, fund of funds and private equity, and multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds. The Company’s services span various investment disciplines, including market capitalization, term and geographic locations.
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