Analyzing Virtus Investment Partners (VRTS) and The Blackstone Group L.P. (BX)

Virtus Investment Partners (NASDAQ: VRTS) and The Blackstone Group L.P. (NYSE:BX) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Volatility and Risk

Virtus Investment Partners has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500. Comparatively, The Blackstone Group L.P. has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Virtus Investment Partners and The Blackstone Group L.P., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtus Investment Partners 1 4 0 0 1.80
The Blackstone Group L.P. 0 1 8 0 2.89

Virtus Investment Partners currently has a consensus price target of $119.40, suggesting a potential upside of 14.09%. The Blackstone Group L.P. has a consensus price target of $37.78, suggesting a potential upside of 19.51%. Given The Blackstone Group L.P.’s stronger consensus rating and higher possible upside, analysts plainly believe The Blackstone Group L.P. is more favorable than Virtus Investment Partners.

Valuation and Earnings

This table compares Virtus Investment Partners and The Blackstone Group L.P.’s 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 2.25 $73.41 million $5.14 20.36
The Blackstone Group L.P. $6.33 billion 3.24 $1.44 billion $2.22 14.24

The Blackstone Group L.P. has higher revenue and earnings than Virtus Investment Partners. The Blackstone Group L.P. 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.

Profitability

This table compares Virtus Investment Partners and The Blackstone Group L.P.’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%
The Blackstone Group L.P. 22.88% 18.97% 8.76%

Dividends

Virtus Investment Partners pays an annual dividend of $1.80 per share and has a dividend yield of 1.7%. The Blackstone Group L.P. pays an annual dividend of $2.16 per share and has a dividend yield of 6.8%. Virtus Investment Partners pays out 35.0% of its earnings in the form of a dividend. The Blackstone Group L.P. pays out 97.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Blackstone Group L.P. has raised its dividend for 4 consecutive years. The Blackstone Group L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

95.9% of Virtus Investment Partners shares are held by institutional investors. Comparatively, 46.6% of The Blackstone Group L.P. shares are held by institutional investors. 4.0% of Virtus Investment Partners shares are held by insiders. Comparatively, 1.0% of The Blackstone Group L.P. 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.

Summary

The Blackstone Group L.P. beats Virtus Investment Partners on 11 of the 17 factors compared between the two stocks.

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.

The Blackstone Group L.P. Company Profile

The Blackstone Group L.P. is a global alternative asset manager. The Company’s alternative asset management businesses include investment vehicles focused on private equity, non-investment grade credit, secondary private equity funds of funds and multi-asset class strategies. It operates through four segments: Private Equity, Real Estate, Hedge Fund Solutions and Credit. The Private Equity segment includes its corporate private equity business, which consists of its corporate private equity funds, Blackstone Capital Partners (BCP) funds, its sector-focused corporate private equity funds, including its energy-focused funds, Blackstone Energy Partners (BEP) funds and its core private equity fund. The Blackstone Real Estate Partners funds target a range of opportunistic real estate and real estate related investments. The Hedge Fund Solutions segment consists of Blackstone Alternative Asset Management (BAAM). The Credit segment consists principally of GSO Capital Partners LP (GSO).

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