Financial Review: Artisan Partners Asset Management (APAM) versus Eaton Vance (EV)

Artisan Partners Asset Management (NYSE: APAM) and Eaton Vance (NYSE:EV) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Earnings & Valuation

This table compares Artisan Partners Asset Management and Eaton Vance’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Artisan Partners Asset Management $720.90 million 4.13 $73.02 million $1.85 21.30
Eaton Vance $1.53 billion 4.32 $282.13 million $2.42 23.11

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

Profitability

This table compares Artisan Partners Asset Management and Eaton Vance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Artisan Partners Asset Management 12.58% 95.09% 12.21%
Eaton Vance 18.45% 33.45% 13.84%

Dividends

Artisan Partners Asset Management pays an annual dividend of $2.40 per share and has a dividend yield of 6.1%. Eaton Vance pays an annual dividend of $1.24 per share and has a dividend yield of 2.2%. Artisan Partners Asset Management pays out 129.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eaton Vance pays out 51.2% of its earnings in the form of a dividend. Artisan Partners Asset Management has raised its dividend for 36 consecutive years. Artisan Partners Asset Management is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Artisan Partners Asset Management has a beta of 1.83, meaning that its share price is 83% more volatile than the S&P 500. Comparatively, Eaton Vance has a beta of 1.89, meaning that its share price is 89% more volatile than the S&P 500.

Institutional & Insider Ownership

63.5% of Artisan Partners Asset Management shares are held by institutional investors. Comparatively, 69.1% of Eaton Vance shares are held by institutional investors. 30.0% of Artisan Partners Asset Management shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Artisan Partners Asset Management and Eaton Vance, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Artisan Partners Asset Management 1 3 2 0 2.17
Eaton Vance 0 5 2 0 2.29

Artisan Partners Asset Management currently has a consensus target price of $30.92, indicating a potential downside of 21.53%. Eaton Vance has a consensus target price of $51.36, indicating a potential downside of 8.16%. Given Eaton Vance’s stronger consensus rating and higher possible upside, analysts plainly believe Eaton Vance is more favorable than Artisan Partners Asset Management.

Summary

Eaton Vance beats Artisan Partners Asset Management on 12 of the 16 factors compared between the two stocks.

About Artisan Partners Asset Management

Artisan Partners Asset Management Inc. is an investment management company. The Company provides a range of the United States, non-United States and global investment strategies, each of which is managed by one of its investment teams. The Company provides investment management services to separate accounts, mutual funds and other pooled investment vehicles. The Company offers its investment management services primarily to institutions and through intermediaries that operate with institutional-like decision-making processes and have long-term investment horizons. The Company provides clients with multiple equity investment strategies spanning market capitalization segments and investing styles in both the United States and non-United States markets. The Company also offers one fixed income strategy, the Artisan High Income strategy. Each strategy is managed by one of the investment teams.

About Eaton Vance

Eaton Vance Corp. is engaged in the business of managing investment funds and providing investment management and advisory services to high-net-worth individuals and institutions. The Company operates as an investment advisor to funds and separate accounts. The Company, through its subsidiaries and other affiliates, manages active equity, income and alternative strategies across a range of investment styles and asset classes, including the United States and global equities, floating-rate bank loans, municipal bonds, global income, high-yield and investment grade bonds. Through its subsidiary, the Company also manages a range of engineered alpha strategies, including systematic equity, systematic alternatives and managed options strategies. The Company’s open-end fund lineup includes tax-managed equity funds, and non-tax-managed equity and multi-asset funds. The Company’s family of closed-end funds includes municipal bond, domestic and global equity, and bank loan.

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