Diamond Hill Investment Group (NASDAQ: DHIL) and Brookfield Asset Management (NYSE:BAM) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.
Volatility and Risk
Diamond Hill Investment Group has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Brookfield Asset Management has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.
60.4% of Diamond Hill Investment Group shares are owned by institutional investors. Comparatively, 55.7% of Brookfield Asset Management shares are owned by institutional investors. 7.3% of Diamond Hill Investment Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares Diamond Hill Investment Group and Brookfield Asset Management’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Diamond Hill Investment Group||$145.20 million||5.11||$49.98 million||$14.47||14.71|
|Brookfield Asset Management||$40.79 billion||0.95||$1.46 billion||$1.33||30.21|
Brookfield Asset Management has higher revenue and earnings than Diamond Hill Investment Group. Diamond Hill Investment Group is trading at a lower price-to-earnings ratio than Brookfield Asset Management, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and price targets for Diamond Hill Investment Group and Brookfield Asset Management, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Diamond Hill Investment Group||0||0||0||0||N/A|
|Brookfield Asset Management||0||0||6||0||3.00|
Brookfield Asset Management has a consensus price target of $48.33, suggesting a potential upside of 20.29%. Given Brookfield Asset Management’s higher probable upside, analysts plainly believe Brookfield Asset Management is more favorable than Diamond Hill Investment Group.
This table compares Diamond Hill Investment Group and Brookfield Asset Management’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Diamond Hill Investment Group||34.43%||29.19%||21.13%|
|Brookfield Asset Management||3.58%||2.02%||0.81%|
Brookfield Asset Management pays an annual dividend of $0.60 per share and has a dividend yield of 1.5%. Diamond Hill Investment Group does not pay a dividend. Brookfield Asset Management pays out 45.1% of its earnings in the form of a dividend. Brookfield Asset Management has raised its dividend for 6 consecutive years.
About Diamond Hill Investment Group
Diamond Hill Investment Group, Inc. provides investment advisory and fund administration services. The Company’s subsidiaries include Diamond Hill Capital Management, Inc. (DHCM), Beacon Hill Fund Services, Inc. (BHFS) and BHIL Distributors, Inc. (BHIL). The Company’s primary objective is to fulfill its fiduciary duty to clients. The Company provides investment management and administration services to mutual funds, institutional accounts and private investment funds. DHCM is an investment advisor to the Diamond Hill Funds (the Funds), a series of open-end mutual funds, private investment funds (Private Funds), an exchange traded fund and other institutional accounts. In addition, DHCM is administrator for the Funds. BHFS provides compliance, treasury and other fund administration services to investment advisors and mutual funds. BHIL is a subsidiary of BHFS. BHIL provides underwriting services to mutual funds. BHFS and BHIL collectively operate as Beacon Hill.
About Brookfield Asset Management
Brookfield Asset Management Inc. is an alternative asset manager. The Company operates in eight segments. The Asset Management segment manages its listed partnerships, private funds and public markets on behalf of its clients. The Property segment includes the ownership, operation and development of office, retail and other properties. The Renewable power segment operates and develops hydroelectric, wind power and other generating facilities. The Infrastructure segment includes the ownership, operation and development of utilities and agricultural operations, among others. The Residential development segment includes homebuilding, condominium development and land development. The Service activities segment includes construction management and contracting services and property services. The Private equity segment includes the investments and operations overseen by its private equity group. The Corporate activities segment includes the allocation of capital to its operating platforms.
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