BlackRock (NYSE: BLK) and Gamco Investors (NYSE:GBL) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, valuation, institutional ownership, earnings, analyst recommendations, dividends and profitabiliy.
Institutional & Insider Ownership
81.9% of BlackRock shares are held by institutional investors. Comparatively, 15.7% of Gamco Investors shares are held by institutional investors. 1.9% of BlackRock shares are held by company insiders. Comparatively, 79.0% of Gamco Investors shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares BlackRock and Gamco Investors’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and target prices for BlackRock and Gamco Investors, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
BlackRock currently has a consensus price target of $418.22, suggesting a potential downside of 0.60%. Given BlackRock’s higher possible upside, analysts plainly believe BlackRock is more favorable than Gamco Investors.
Volatility and Risk
BlackRock has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500. Comparatively, Gamco Investors has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.
Valuation & Earnings
This table compares BlackRock and Gamco Investors’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|BlackRock||$11.35 billion||6.04||$5.01 billion||$20.35||20.68|
|Gamco Investors||$357.53 million||2.39||$188.67 million||$3.85||7.69|
BlackRock has higher revenue and earnings than Gamco Investors. Gamco Investors is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.
BlackRock pays an annual dividend of $10.00 per share and has a dividend yield of 2.4%. Gamco Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. BlackRock pays out 49.1% of its earnings in the form of a dividend. Gamco Investors pays out 2.1% 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. BlackRock has increased its dividend for 5 consecutive years and Gamco Investors has increased its dividend for 7 consecutive years.
BlackRock beats Gamco Investors on 11 of the 16 factors compared between the two stocks.
BlackRock, Inc. (BlackRock) is an investment management company. BlackRock provides a range of investment and risk management services to institutional and retail clients worldwide. Its diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Its product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Its products are offered directly and through intermediaries in a range of vehicles, including open-end and closed-end mutual funds, iShares exchange-traded funds (ETFs), separate accounts, collective investment funds and other pooled investment vehicles. It offers its Aladdin investment system, as well as risk management, outsourcing, advisory and technology services, to institutional investors and wealth management intermediaries under the BlackRock Solutions name.
About Gamco Investors
GAMCO Investors, Inc. is a holding company. The Company is a provider of investment advisory services to open and closed-end funds, institutional and private wealth management investors principally in the United States. The Company operates through the investment advisory and asset management business segment. It manages assets on a discretionary basis and invests in securities through various investment styles. Its assets under management are organized into three groups: Institutional and Private Wealth Management; Open and Closed-End Funds, and the GAMCO International SICAV (SICAV). The Company provides advisory services to a range of investors, including corporate retirement plans, foundations, endowments and private wealth clients, and also serves as sub-advisor to third-party investment funds, including registered investment companies. As of December 31, 2016, it had provided advisory services to 21 open-end funds, 15 closed-end funds and one exchange traded managed fund.
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