Comparing Fortress Investment Group (FIG) and BlackRock (NYSE:BLK)

BlackRock (NYSE: BLK) and Fortress Investment Group (NYSE:FIG) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitabiliy, valuation and institutional ownership.

Profitability

This table compares BlackRock and Fortress Investment Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BlackRock 29.92% 11.79% 1.52%
Fortress Investment Group 8.26% 41.94% 16.42%

Valuation and Earnings

This table compares BlackRock and Fortress Investment Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BlackRock $11.52 billion 5.99 $5.05 billion $20.84 20.35
Fortress Investment Group $933.37 million 1.87 $209.67 million $0.31 25.81

BlackRock has higher revenue and earnings than Fortress Investment Group. BlackRock is trading at a lower price-to-earnings ratio than Fortress Investment Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

80.9% of BlackRock shares are owned by institutional investors. Comparatively, 43.7% of Fortress Investment Group shares are owned by institutional investors. 1.9% of BlackRock shares are owned by insiders. Comparatively, 45.2% of Fortress Investment Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

BlackRock has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500. Comparatively, Fortress Investment Group has a beta of 1.96, meaning that its share price is 96% more volatile than the S&P 500.

Dividends

BlackRock pays an annual dividend of $10.00 per share and has a dividend yield of 2.4%. Fortress Investment Group pays an annual dividend of $0.36 per share and has a dividend yield of 4.5%. BlackRock pays out 48.0% of its earnings in the form of a dividend. Fortress Investment Group pays out 116.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BlackRock has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for BlackRock and Fortress Investment Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BlackRock 0 5 7 0 2.58
Fortress Investment Group 0 4 0 0 2.00

BlackRock currently has a consensus price target of $436.00, suggesting a potential upside of 2.83%. Fortress Investment Group has a consensus price target of $6.00, suggesting a potential downside of 25.00%. Given BlackRock’s stronger consensus rating and higher possible upside, research analysts clearly believe BlackRock is more favorable than Fortress Investment Group.

Summary

BlackRock beats Fortress Investment Group on 11 of the 17 factors compared between the two stocks.

BlackRock Company Profile

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.

Fortress Investment Group Company Profile

Fortress Investment Group LLC (Fortress) is an investment management firm. The Company operates through segments, including private equity funds, permanent capital vehicles, credit hedge funds, credit PE funds, liquid hedge funds and Logan Circle. Its business is to sponsor the formation of, and provide investment management services for, various investment funds, permanent capital vehicles and related managed accounts (the Fortress Funds). Fortress’s sources of income from the Fortress Funds are management fees, incentive income and investment income on its investments in the funds. As of December 31, 2016, the Company’s private equity business manages approximately $13.5 billion of assets under management (AUM); credit funds business manages approximately $18.1 billion of AUM; liquid hedge funds business manages over $4.6 billion of AUM, and Logan Circle business manages approximately $33.4 billion of AUM.

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