Virtus Investment Partners (NASDAQ: VRTS) and OM Asset Management PLC (NYSE:OMAM) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a summary of current ratings and price targets for Virtus Investment Partners and OM Asset Management PLC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtus Investment Partners 1 4 0 0 1.80
OM Asset Management PLC 0 0 6 0 3.00

Virtus Investment Partners presently has a consensus price target of $119.40, indicating a potential upside of 2.93%. OM Asset Management PLC has a consensus price target of $17.88, indicating a potential upside of 20.78%. Given OM Asset Management PLC’s stronger consensus rating and higher probable upside, analysts clearly believe OM Asset Management PLC is more favorable than Virtus Investment Partners.

Dividends

Virtus Investment Partners pays an annual dividend of $1.80 per share and has a dividend yield of 1.6%. OM Asset Management PLC pays an annual dividend of $0.36 per share and has a dividend yield of 2.4%. Virtus Investment Partners pays out 35.0% of its earnings in the form of a dividend. OM Asset Management PLC pays out 45.6% 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.

Valuation & Earnings

This table compares Virtus Investment Partners and OM Asset Management PLC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Virtus Investment Partners $336.08 million 2.49 $73.41 million $5.14 22.57
OM Asset Management PLC $772.40 million 2.10 $173.80 million $0.79 18.73

OM Asset Management PLC has higher revenue and earnings than Virtus Investment Partners. OM Asset Management PLC is trading at a lower price-to-earnings ratio than Virtus Investment Partners, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Virtus Investment Partners has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500. Comparatively, OM Asset Management PLC has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Institutional & Insider Ownership

95.9% of Virtus Investment Partners shares are owned by institutional investors. Comparatively, 66.0% of OM Asset Management PLC shares are owned by institutional investors. 4.0% of Virtus Investment Partners shares are owned by insiders. Comparatively, 1.5% of OM Asset Management PLC shares are owned 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.

Profitability

This table compares Virtus Investment Partners and OM Asset Management PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virtus Investment Partners 12.13% 11.35% 3.84%
OM Asset Management PLC 12.12% 95.51% 12.52%

Virtus Investment Partners Company Profile

Virtus Investment Partners, Inc. (Virtus) is a provider of investment management and related services to individuals and institutions. The Company provides its products in various forms and through multiple distribution channels. Its retail products include open-end mutual funds, closed-end funds, exchange traded funds, variable insurance funds, undertakings for collective investments in transferable securities (UCITS) and separately managed accounts. Its open-end mutual funds are distributed through intermediaries. Its closed-end funds trade on the New York Stock Exchange. Its variable insurance funds are available as investment options in variable annuities and life insurance products distributed by life insurance companies. Separately managed accounts consists of intermediary programs, sponsored and distributed by unaffiliated brokerage firms, and private client accounts, which are offered to the high net-worth clients of its affiliated managers.

OM Asset Management PLC Company Profile

OM Asset Management plc is a global, diversified, multi-boutique asset management company. As of December 31, 2016, the Company operated its business through its eight Affiliates, each of which operated autonomously and employed its own investment processes. Its Affiliates include Acadian Asset Management LLC; Barrow, Hanley, Mewhinney & Strauss, LLC; Campbell Global, LLC; Copper Rock Capital Partners LLC; Heitman LLC; Investment Counselors of Maryland, LLC; Landmark Partners, LLC, and Thompson, Siegel & Walmsley LLC. It works with boutique asset managers, and the Company leverages the resources within its organization to engage with its Affiliates and provide them with capabilities unavailable to specialist asset management firms. The Company works with its Affiliates to identify and execute upon opportunities for their businesses in areas, such as business line expansion and product development, as well as activities required for the operation of investment boutiques.

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