Comparing T. Rowe Price Group (TROW) and The Carlyle Group (CG)

T. Rowe Price Group (NASDAQ: TROW) and The Carlyle Group (NASDAQ:CG) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Profitability

This table compares T. Rowe Price Group and The Carlyle Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
T. Rowe Price Group 33.10% 24.76% 19.41%
The Carlyle Group 5.43% 43.32% 7.82%

Volatility and Risk

T. Rowe Price Group has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, The Carlyle Group has a beta of 1.79, suggesting that its share price is 79% more volatile than the S&P 500.

Earnings and Valuation

This table compares T. Rowe Price Group and The Carlyle Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
T. Rowe Price Group $4.22 billion 5.89 $1.22 billion $6.10 16.82
The Carlyle Group $2.27 billion 0.89 $6.40 million $1.82 11.37

T. Rowe Price Group has higher revenue and earnings than The Carlyle Group. The Carlyle Group is trading at a lower price-to-earnings ratio than T. Rowe Price Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for T. Rowe Price Group and The Carlyle Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
T. Rowe Price Group 2 5 2 0 2.00
The Carlyle Group 0 3 6 0 2.67

T. Rowe Price Group presently has a consensus target price of $90.63, indicating a potential downside of 11.70%. The Carlyle Group has a consensus target price of $24.63, indicating a potential upside of 18.96%. Given The Carlyle Group’s stronger consensus rating and higher possible upside, analysts clearly believe The Carlyle Group is more favorable than T. Rowe Price Group.

Institutional and Insider Ownership

72.2% of T. Rowe Price Group shares are held by institutional investors. Comparatively, 38.1% of The Carlyle Group shares are held by institutional investors. 3.6% of T. Rowe Price Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

T. Rowe Price Group pays an annual dividend of $2.28 per share and has a dividend yield of 2.2%. The Carlyle Group pays an annual dividend of $2.24 per share and has a dividend yield of 10.8%. T. Rowe Price Group pays out 37.4% of its earnings in the form of a dividend. The Carlyle Group pays out 123.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Carlyle Group has raised its dividend for 30 consecutive years. The Carlyle Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

T. Rowe Price Group beats The Carlyle Group on 10 of the 17 factors compared between the two stocks.

About T. Rowe Price Group

T. Rowe Price Group, Inc. is a financial services holding company. The Company provides global investment management services through its subsidiaries to investors across the world. The Company provides an array of Company sponsored the United States mutual funds, other sponsored pooled investment vehicles, sub advisory services, separate account management, recordkeeping, and related services to individuals, advisors, institutions, financial intermediaries and retirement plan sponsors. The Company distributes its products in countries located within three geographical regions: North America, Europe Middle East and Africa (EMEA), and Asia Pacific (APAC). It also offers specialized advisory services, including management of stable value investment contracts and a distribution management service for the disposition of equity securities its clients receive from third-party venture capital investment pools. As of December 31, 2016, it serviced clients in 45 countries across the world.

About The Carlyle Group

The Carlyle Group L.P. is a diversified multi-product global alternative asset management firm. The Company operates in four segments: Corporate Private Equity (CPE), Real Assets, Global Market Strategies (GMS) and Investment Solutions. Corporate Private Equity advises its buyout and growth capital funds, which pursue various corporate investments of different sizes and growth potentials. As of December 31, 2016, the Real Assets segment advised its 26 active carry funds focused on real estate, infrastructure and energy and natural resources (including power). As of December 31, 2016, the Global Market Strategies segment advised a group of 57 active funds that pursue investment strategies, including leveraged loans and structured credit, energy mezzanine opportunities, middle market lending and distressed debt. Its Investment Solutions segment provides investment opportunities and resources for its investors and clients.

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