The Goldman Sachs Group (NYSE:GS – Get Rating) and GAMCO Investors (NYSE:GAMI – Get Rating) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, dividends, earnings, profitability, valuation, institutional ownership and risk.
Analyst Recommendations
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This is a summary of current ratings for The Goldman Sachs Group and GAMCO Investors, as reported by MarketBeat.com.
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The Goldman Sachs Group
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The Goldman Sachs Group presently has a consensus target price of $400.36, suggesting a potential upside of 7.05%. Given The Goldman Sachs Group"s higher possible upside, equities analysts plainly believe The Goldman Sachs Group is more favorable than GAMCO Investors.
Earnings and Valuation
This table compares The Goldman Sachs Group and GAMCO Investors" top-line revenue, earnings per share and valuation.
The Goldman Sachs Group has higher revenue and earnings than GAMCO Investors. GAMCO Investors is trading at a lower price-to-earnings ratio than The Goldman Sachs Group, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
The Goldman Sachs Group has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, GAMCO Investors has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.
Profitability
This table compares The Goldman Sachs Group and GAMCO Investors" net margins, return on equity and return on assets.
Institutional and Insider Ownership
69.1% of The Goldman Sachs Group shares are held by institutional investors. Comparatively, 30.5% of GAMCO Investors shares are held by institutional investors. 0.6% of The Goldman Sachs Group shares are held by insiders. Comparatively, 81.2% of GAMCO Investors shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Dividends
The Goldman Sachs Group pays an annual dividend of $10.00 per share and has a dividend yield of 2.7%. GAMCO Investors pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. The Goldman Sachs Group pays out 26.6% of its earnings in the form of a dividend. GAMCO Investors pays out 7.7% 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. The Goldman Sachs Group has raised its dividend for 2 consecutive years. The Goldman Sachs Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
The Goldman Sachs Group beats GAMCO Investors on 12 of the 16 factors compared between the two stocks.
About The Goldman Sachs Group
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The Goldman Sachs Group, Inc., a financial institution, provides a range of financial services for corporations, financial institutions, governments, and individuals worldwide. It operates through four segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management. The company"s Investment Banking segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, and spin-offs; and middle-market lending, relationship lending, and acquisition financing, as well as transaction banking services. This segment also offers underwriting services, such as equity underwriting for common and preferred stock and convertible and exchangeable securities; and debt underwriting for various types of debt instruments, including investment-grade and high-yield debt, bank and bridge loans, and emerging-and growth-market debt, as well as originates structured securities. Its Global Markets segment is involved in client execution activities for cash and derivative instruments; credit and interest rate products; and provision of equity intermediation and equity financing, clearing, settlement, and custody services, as well as mortgages, currencies, commodities, and equities related products. The company"s Asset Management segment manages assets across various classes, including equity, fixed income, hedge funds, credit funds, private equity, real estate, currencies, and commodities; and provides customized investment advisory solutions, as well as invests in corporate, real estate, and infrastructure entities. Its Consumer & Wealth Management segment offers wealth advisory and banking services, including financial planning, investment management, deposit taking, and lending; private banking; and unsecured loans, as well as accepts saving and time deposits. The company was founded in 1869 and is headquartered in New York, New York.
About GAMCO Investors
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GAMCO Investors, Inc. is a publicly owned holding investment manager. The firm also provides wealth management, investment advisory, institutional research, brokerage, dealer, underwriting, and distribution services to its clients. It provides its services to individuals including high net worth individuals, corporate pension and profit-sharing plans, foundations, endowments, jointly trust plans, municipalities, and investment companies. The firm, through its subsidiaries, manages separate client-focused equity, fixed income, and balanced portfolios. It also launches equity, fixed income, and balanced mutual funds and manages equity mutual funds for its clients. Through its subsidiaries the firm invests in the public equity and fixed income markets across the globe. It invests in value stocks of companies. The firm employs fundamental analysis with a focus on bottom-up stock picking approach to create its portfolios. It conducts in-house research to make its investments. The firm was founded in 1976 and is based in Rye, New York with additional offices in Greenwich, Connecticut; Bannockburn, Illinois; and Tokyo, Japan. GAMCO Investors, Inc. operates as a subsidiary of Ggcp Holdings Llc.
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