Federated Investors (NYSE: FII) is one of 59 publicly-traded companies in the “Investment Management” industry, but how does it contrast to its peers? We will compare Federated Investors to related businesses based on the strength of its dividends, risk, profitability, analyst recommendations, earnings, institutional ownership and valuation.

Risk and Volatility

Federated Investors has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Federated Investors’ peers have a beta of 1.41, meaning that their average stock price is 41% more volatile than the S&P 500.

Dividends

Federated Investors pays an annual dividend of $1.00 per share and has a dividend yield of 3.4%. Federated Investors pays out 48.1% of its earnings in the form of a dividend. As a group, “Investment Management” companies pay a dividend yield of 3.5% and pay out 65.6% of their earnings in the form of a dividend.

Profitability

This table compares Federated Investors and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Federated Investors 18.91% 33.93% 18.36%
Federated Investors Competitors 31.16% 108.76% 29.33%

Valuation and Earnings

This table compares Federated Investors and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Federated Investors $1.13 billion $345.66 million 14.28
Federated Investors Competitors $817.34 million $231.50 million -10.17

Federated Investors has higher revenue and earnings than its peers. Federated Investors is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of current ratings and price targets for Federated Investors and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Federated Investors 2 4 0 0 1.67
Federated Investors Competitors 666 2044 1973 41 2.29

Federated Investors currently has a consensus target price of $23.50, indicating a potential downside of 20.88%. As a group, “Investment Management” companies have a potential downside of 2.68%. Given Federated Investors’ peers stronger consensus rating and higher possible upside, analysts clearly believe Federated Investors has less favorable growth aspects than its peers.

Institutional and Insider Ownership

82.9% of Federated Investors shares are held by institutional investors. Comparatively, 50.0% of shares of all “Investment Management” companies are held by institutional investors. 7.1% of Federated Investors shares are held by insiders. Comparatively, 26.8% of shares of all “Investment Management” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Federated Investors peers beat Federated Investors on 9 of the 15 factors compared.

About Federated Investors

Federated Investors, Inc. (Federated) is a provider of investment management products and related financial services. Federated operates through investment management business segment. It is engaged in sponsoring, marketing and providing investment-related services to various investment products, including mutual funds and Separate Accounts, which include separately managed accounts, institutional accounts, sub-advised funds and other managed products. It operates in one segment, the investment management business. As of December 31, 2016, Federated provided investment advisory services to 124 sponsored investment companies and other funds (Federated Funds). It markets these funds to banks, brokers and dealers and other financial intermediaries using them to meet the needs of their customers and clients, including retail investors, corporations and retirement plans. The Company offers a range of products and strategies, including money market, equity and fixed-income investments.

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