Critical Review: The Carlyle Group (CG) vs. Manning & Napier (MN)

The Carlyle Group (NASDAQ: CG) and Manning & Napier (NYSE:MN) are both financials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Analyst Ratings

This is a breakdown of current ratings and price targets for The Carlyle Group and Manning & Napier, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Carlyle Group 0 3 6 0 2.67
Manning & Napier 0 2 0 0 2.00

The Carlyle Group presently has a consensus target price of $24.63, suggesting a potential upside of 13.22%. Manning & Napier has a consensus target price of $4.00, suggesting a potential upside of 8.11%. Given The Carlyle Group’s stronger consensus rating and higher possible upside, analysts plainly believe The Carlyle Group is more favorable than Manning & Napier.

Profitability

This table compares The Carlyle Group and Manning & Napier’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Carlyle Group 5.43% 43.32% 7.82%
Manning & Napier 3.30% 30.20% 18.84%

Dividends

The Carlyle Group pays an annual dividend of $2.24 per share and has a dividend yield of 10.3%. Manning & Napier pays an annual dividend of $0.32 per share and has a dividend yield of 8.6%. 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. Manning & Napier pays out 66.7% of its earnings in the form of a dividend.

Insider and Institutional Ownership

38.1% of The Carlyle Group shares are held by institutional investors. Comparatively, 51.6% of Manning & Napier shares are held by institutional investors. 2.5% of Manning & Napier shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares The Carlyle Group and Manning & Napier’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Carlyle Group $2.27 billion 0.94 $6.40 million $1.82 11.95
Manning & Napier $248.94 million 0.22 $9.27 million $0.48 7.71

Manning & Napier has lower revenue, but higher earnings than The Carlyle Group. Manning & Napier is trading at a lower price-to-earnings ratio than The Carlyle Group, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

The Carlyle Group has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500. Comparatively, Manning & Napier has a beta of 1.52, indicating that its share price is 52% more volatile than the S&P 500.

Summary

The Carlyle Group beats Manning & Napier on 11 of the 16 factors compared between the two stocks.

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.

About Manning & Napier

Manning & Napier, Inc. is an independent investment management company. The Company operates through investment management industry segment. It provides a range of investment solutions through separately managed accounts, mutual funds and collective investment trust funds, as well as a range of consultative services. It offers equity, fixed income and alternative strategies, as well as a range of blended asset portfolios, such as life cycle funds. It serves a client base of high net worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans (Taft-Hartley), endowments and foundations. It offers its investment management capabilities through direct sales to high net worth individuals and institutions, as well as through third-party intermediaries, platforms and institutional investment consultants. Its investment management offerings include approximately 40 separate account composites, and over 60 mutual funds and collective investment trusts.

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