Critical Contrast: T. Rowe Price Group (NASDAQ:TROW) & GCM Grosvenor (NASDAQ:GCMG)

T. Rowe Price Group (NASDAQ:TROW) and GCM Grosvenor (NASDAQ:GCMG) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of recent ratings and price targets for T. Rowe Price Group and GCM Grosvenor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
T. Rowe Price Group	5	10	0	0	1.67
GCM Grosvenor	0	1	2	0	2.67

T. Rowe Price Group presently has a consensus price target of $99.54, suggesting a potential downside of 3.37%. GCM Grosvenor has a consensus price target of $15.50, suggesting a potential upside of 42.33%. Given GCM Grosvenor’s stronger consensus rating and higher possible upside, analysts clearly believe GCM Grosvenor is more favorable than T. Rowe Price Group.

Profitability

This table compares T. Rowe Price Group and GCM Grosvenor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
T. Rowe Price Group	28.28%	20.60%	15.55%
GCM Grosvenor	9.05%	222.78%	18.36%

Dividends

T. Rowe Price Group pays an annual dividend of $5.20 per share and has a dividend yield of 5.0%. GCM Grosvenor pays an annual dividend of $0.48 per share and has a dividend yield of 4.4%. T. Rowe Price Group pays out 55.7% of its earnings in the form of a dividend. GCM Grosvenor pays out 106.7% 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 39 consecutive years. T. Rowe Price Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

T. Rowe Price Group has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500. Comparatively, GCM Grosvenor has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Valuation & Earnings

This table compares T. Rowe Price Group and GCM Grosvenor”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
T. Rowe Price Group	$7.31 billion	3.02	$2.09 billion	$9.33	11.04
GCM Grosvenor	$557.57 million	3.95	$45.37 million	$0.45	24.20

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

Institutional & Insider Ownership

73.4% of T. Rowe Price Group shares are owned by institutional investors. Comparatively, 100.0% of GCM Grosvenor shares are owned by institutional investors. 1.6% of T. Rowe Price Group shares are owned by insiders. Comparatively, 70.7% of GCM Grosvenor shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

GCM Grosvenor beats T. Rowe Price Group on 9 of the 17 factors compared between the two stocks.

About T. Rowe Price Group

T. Rowe Price Group, Inc. is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe. It employs fundamental and quantitative analysis with a bottom-up approach. The firm utilizes in-house and external research to make its investments. It employs socially responsible investing with a focus on environmental, social, and governance issues. It makes investment in late-stage venture capital transactions and usually invests between $3 million and $5 million. The firm was previously known as T. Rowe Group, Inc. and T. Rowe Price Associates, Inc. T. Rowe Price Group, Inc. was founded in 1937 and is based in Baltimore, Maryland, with additional offices in Colorado Springs, Colorado; Owings Mills, Maryland; San Francisco, California; New York, New York; Philadelphia, Pennsylvania; Tampa, Florida; Toronto, Ontario; Hellerup, Denmark; Amsterdam, The Netherlands; Luxembourg, Grand Duchy of Luxembourg; Zurich, Switzerland; Dubai, United Arab Emirates; London, United Kingdom; Sydney, New South Wales; Hong Kong; Tokyo, Japan; Singapore; Frankfurt, Shanghai, China; Germany, Madrid, Spain, Milan, Italy, Stockholm, Sweden, Melbourne, Australia, Amsterdam, Netherlands and Washington, DC.

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.