Reviewing Cannae (NYSE:CNNE) and Ares Management (NYSE:ARES)

Cannae (NYSE:CNNE) and Ares Management (NYSE:ARES) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Earnings and Valuation

This table compares Cannae and Ares Management”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cannae	$452.50 million	1.74	-$304.60 million	($7.73)	-2.06
Ares Management	$3.88 billion	14.80	$463.74 million	$2.33	75.47

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

Analyst Ratings

This is a summary of recent ratings and target prices for Cannae and Ares Management, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cannae	1	1	2	0	2.25
Ares Management	0	5	13	0	2.72

Cannae presently has a consensus target price of $20.50, indicating a potential upside of 28.49%. Ares Management has a consensus target price of $192.14, indicating a potential upside of 9.26%. Given Cannae’s higher possible upside, equities analysts plainly believe Cannae is more favorable than Ares Management.

Dividends

Cannae pays an annual dividend of $0.60 per share and has a dividend yield of 3.8%. Ares Management pays an annual dividend of $4.48 per share and has a dividend yield of 2.5%. Cannae pays out -7.8% of its earnings in the form of a dividend. Ares Management pays out 192.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ares Management has increased its dividend for 7 consecutive years. Cannae is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Cannae has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Ares Management has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.

Insider & Institutional Ownership

88.1% of Cannae shares are held by institutional investors. Comparatively, 50.0% of Ares Management shares are held by institutional investors. 10.9% of Cannae shares are held by insiders. Comparatively, 36.9% of Ares Management shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Cannae and Ares Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cannae	-108.39%	-23.16%	-18.38%
Ares Management	11.72%	16.33%	4.00%

Summary

Ares Management beats Cannae on 13 of the 17 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 Ares Management

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. The company's Tradable Credit Group segment manages various types of investment funds, such as commingled and separately managed accounts for institutional investors, and publicly traded vehicles and sub-advised funds for retail investors in the tradable and non-investment grade corporate credit markets. Its Direct Lending Group segment provides financing solutions to small-to-medium sized companies. The company's Private Equity Group segment focuses on majority or shared-control investments primarily in under-capitalized companies. Its Real Estate Group segment invests in new developments and the repositioning of assets, with a focus on control or majority-control investments; and originates and invests in a range of self-originated financing opportunities for middle-market owners and operators of commercial real estate. The firm was previously known as Ares Management, L.P. Ares Management Corporation was founded in 1997 and is headquartered in Los Angeles, California with additional offices in the United States, Europe and Asia. Ares Management GP LLC is the general partner of the company.