Contrasting Affiliated Managers Group (AMG) & Morningstar (MORN)

Affiliated Managers Group (NYSE:AMG) and Morningstar (NASDAQ:MORN) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Risk and Volatility

Affiliated Managers Group has a beta of 1.53, meaning that its share price is 53% more volatile than the S&P 500. Comparatively, Morningstar has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Affiliated Managers Group and Morningstar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Affiliated Managers Group 0 2 6 0 2.75
Morningstar 0 0 0 0 N/A

Affiliated Managers Group currently has a consensus target price of $177.88, indicating a potential upside of 72.63%. Given Affiliated Managers Group’s higher probable upside, research analysts plainly believe Affiliated Managers Group is more favorable than Morningstar.

Dividends

Affiliated Managers Group pays an annual dividend of $1.20 per share and has a dividend yield of 1.2%. Morningstar pays an annual dividend of $1.00 per share and has a dividend yield of 0.9%. Affiliated Managers Group pays out 8.2% of its earnings in the form of a dividend. Morningstar has increased its dividend for 6 consecutive years.

Profitability

This table compares Affiliated Managers Group and Morningstar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Affiliated Managers Group 29.38% 19.37% 9.98%
Morningstar 17.94% 18.50% 11.22%

Valuation & Earnings

This table compares Affiliated Managers Group and Morningstar’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Affiliated Managers Group $2.31 billion 2.35 $689.50 million $14.60 7.06
Morningstar $911.70 million 5.39 $136.90 million N/A N/A

Affiliated Managers Group has higher revenue and earnings than Morningstar.

Insider and Institutional Ownership

92.2% of Affiliated Managers Group shares are owned by institutional investors. Comparatively, 40.5% of Morningstar shares are owned by institutional investors. 0.9% of Affiliated Managers Group shares are owned by insiders. Comparatively, 57.5% of Morningstar shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Affiliated Managers Group beats Morningstar on 9 of the 15 factors compared between the two stocks.

Affiliated Managers Group Company Profile

Affiliated Managers Group, Inc., through its affiliates, operates as an asset management company providing investment management services to mutual funds, institutional clients, and high net worth individuals in the United States. It provides advisory or subadvisory services to mutual funds. These funds are distributed to retail and institutional clients directly and through intermediaries, including independent investment advisors, retirement plan sponsors, broker-dealers, major fund marketplaces, and bank trust departments. The company also offers investment products in various investment styles in the institutional distribution channel, including small, small/mid, mid, and large capitalization value and growth equity, and emerging markets. In addition, it offers quantitative, alternative, and fixed income products, and manages assets for foundations and endowments, defined benefit, and defined contribution plans for corporations and municipalities. Affiliated Managers Group provides investment management or customized investment counseling and fiduciary services. The company was formed as a corporation under the laws of Delaware in 1993. Affiliated Managers Group is based in Prides Crossing, Massachusetts.

Morningstar Company Profile

Morningstar, Inc. provides independent investment research services in North America, Europe, Australia, and Asia. It offers a line of data, research, and software tools on a range of investment offerings, including managed investment products, publicly listed companies, fixed income securities, private capital markets, and real-time global market data for financial advisors, asset managers, retirement plan providers and sponsors, and individual and institutional investors. The company offers Morningstar Data, an investment data spanning various investment databases, including pricing and commodity data; Morningstar Direct, an institutional investment research platform; investment management solutions, which include Morningstar Managed Portfolios, the strategist models on third-party managed account platforms, as well as services for institutional asset management, asset allocation, and manager selection; institutional asset management services for asset management firms, broker-dealers, and insurance providers; Morningstar Advisor Workstation, a Web-based investment planning system; and Morningstar.com, a Website for individual investors. It also provides Morningstar Enterprise Components, a set of tools and capabilities that builds customized Websites or enhances existing solutions; Morningstar Research, which includes equity research and manager research; Morningstar Credit Ratings that provides new issue and surveillance ratings and analysis for structured credits, as well as operational risk assessment services; Morningstar Indexes, a set of investment indexes; workplace solutions, such as retirement advice and managed accounts, fiduciary services, and custom models; a mobile application, excel plug-in, data feeds, and data solutions; equity and manager research, and credit rating services; and institutional asset management, asset allocation, and manager selection services. The company was founded in 1984 and is headquartered in Chicago, Illinois.

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