Head to Head Survey: Acadian Asset Management (NYSE:AAMI) and Ares Management (NYSE:ARES)

Acadian Asset Management (NYSE:AAMI) and Ares Management (NYSE:ARES) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Valuation & Earnings

This table compares Acadian Asset Management and Ares Management”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Acadian Asset Management	$505.60 million	1.69	$85.00 million	$2.24	10.20
Ares Management	$5.19 billion	7.14	$440.96 million	$2.03	57.90

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

Dividends

Acadian Asset Management pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. Ares Management pays an annual dividend of $3.72 per share and has a dividend yield of 3.2%. Acadian Asset Management pays out 1.8% of its earnings in the form of a dividend. Ares Management pays out 183.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current recommendations for Acadian Asset Management and Ares Management, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Acadian Asset Management	0	1	0	0	2.00
Ares Management	0	5	9	0	2.64

Acadian Asset Management presently has a consensus target price of $27.00, indicating a potential upside of 18.16%. Ares Management has a consensus target price of $176.38, indicating a potential upside of 50.06%. Given Ares Management’s stronger consensus rating and higher probable upside, analysts plainly believe Ares Management is more favorable than Acadian Asset Management.

Volatility and Risk

Acadian Asset Management has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500. Comparatively, Ares Management has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.

Insider and Institutional Ownership

98.7% of Acadian Asset Management shares are owned by institutional investors. Comparatively, 50.0% of Ares Management shares are owned by institutional investors. 27.7% of Acadian Asset Management shares are owned by company insiders. Comparatively, 41.9% of Ares Management shares are owned 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.

Profitability

This table compares Acadian Asset Management and Ares Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Acadian Asset Management	16.81%	1,000.27%	18.11%
Ares Management	11.35%	16.64%	3.41%

Summary

Ares Management beats Acadian Asset Management on 9 of the 16 factors compared between the two stocks.

About Acadian Asset Management

Acadian Asset Management Inc. is a publically owned asset management holding company. The firm provides its services to individuals and institutions. It manages separate client focused portfolios through its subsidiaries. The firm also launches equity mutual funds for its clients. It invests in public equity, fixed income, and alternative investment markets through its subsidiaries. The firm was founded in 1980 is based Boston, Massachusetts. It was formally known as BrightSphere Investment Group plc. BrightSphere Investment Group Inc. was formed in 1980 and is based in Boston, Massachusetts.

About Ares Management

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. The company's Tradable Credit Group segment manages various types of investment funds, such as commingled and separately managed accounts for institutional investors, and publicly traded vehicles and sub-advised funds for retail investors in the tradable and non-investment grade corporate credit markets. Its Direct Lending Group segment provides financing solutions to small-to-medium sized companies. The company's Private Equity Group segment focuses on majority or shared-control investments primarily in under-capitalized companies. Its Real Estate Group segment invests in new developments and the repositioning of assets, with a focus on control or majority-control investments; and originates and invests in a range of self-originated financing opportunities for middle-market owners and operators of commercial real estate. The firm was previously known as Ares Management, L.P. Ares Management Corporation was founded in 1997 and is headquartered in Los Angeles, California with additional offices in the United States, Europe and Asia. Ares Management GP LLC is the general partner of the company.