Head to Head Analysis: Cannae (NYSE:CNNE) and Affiliated Managers Group (NYSE:AMG)

Cannae (NYSE:CNNE) and Affiliated Managers Group (NYSE:AMG) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Profitability

This table compares Cannae and Affiliated Managers Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cannae	-103.77%	-36.53%	-27.75%
Affiliated Managers Group	35.55%	20.17%	9.19%

Dividends

Cannae pays an annual dividend of $0.60 per share and has a dividend yield of 4.3%. Affiliated Managers Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Cannae pays out -7.7% of its earnings in the form of a dividend. Affiliated Managers Group pays out 0.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cannae is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Cannae has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Affiliated Managers Group has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500.

Valuation and Earnings

This table compares Cannae and Affiliated Managers Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cannae	$423.60 million	1.44	-$513.20 million	($7.81)	-1.78
Affiliated Managers Group	$2.12 billion	3.76	$716.60 million	$24.72	12.22

Affiliated Managers Group has higher revenue and earnings than Cannae. Cannae is trading at a lower price-to-earnings ratio than Affiliated Managers Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

88.1% of Cannae shares are held by institutional investors. Comparatively, 95.3% of Affiliated Managers Group shares are held by institutional investors. 10.9% of Cannae shares are held by insiders. Comparatively, 2.9% of Affiliated Managers Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Cannae and Affiliated Managers Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cannae	1	1	2	0	2.25
Affiliated Managers Group	0	1	7	0	2.88

Cannae presently has a consensus price target of $17.00, suggesting a potential upside of 22.54%. Affiliated Managers Group has a consensus price target of $362.29, suggesting a potential upside of 19.97%. Given Cannae’s higher probable upside, analysts plainly believe Cannae is more favorable than Affiliated Managers Group.

Summary

Affiliated Managers Group beats Cannae on 11 of the 16 factors compared between the two stocks.

About Cannae

Cannae Holdings, Inc. is a principal investment firm. The firm primarily invests in restaurants, technology enabled healthcare services, financial services and more. It takes both minority and majority stakes. Cannae Holdings, Inc. was founded in 2014 and is based in Las Vegas, Nevada.

About Affiliated Managers Group

Affiliated Managers Group, Inc., through its affiliates, operates as an investment management company providing investment management services to mutual funds, institutional clients,retails and high net worth individuals in the United States. It provides advisory or sub-advisory services to mutual funds. These funds are distributed to retail, high net worth and institutional clients directly and through intermediaries, including independent investment advisors, retirement plan sponsors, broker-dealers, major fund marketplaces, and bank trust departments. The company also offers investment products in various investment styles in the institutional distribution channel, including small, small/mid, mid, and large capitalization value and growth equity, and emerging markets. In addition, it offers quantitative, alternative, and fixed income products, and manages assets for foundations and endowments, defined benefit, and defined contribution plans for corporations and municipalities. Affiliated Managers Group provides investment management or customized investment counseling and fiduciary services. Affiliated Managers Group, Inc. was formed in 1993 and is based in West Palm Beach, Florida with additional offices in Prides Crossing, Massachusetts; Stamford, Connecticut; London, United Kingdom; Dubai, United Arab Emirates; Sydney, Australia; Hong Kong; Tokyo, Japan, Zurich, Switzerland and Delaware.