Head to Head Survey: Alcentra Capital (ABDC) versus Lazard (LAZ)

Lazard (NYSE:LAZ) and Alcentra Capital (NASDAQ:ABDC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares Lazard and Alcentra Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lazard 18.27% 50.62% 11.32%
Alcentra Capital 19.06% 9.24% 5.15%

Risk and Volatility

Lazard has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500. Comparatively, Alcentra Capital has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Lazard and Alcentra Capital, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lazard 1 3 1 0 2.00
Alcentra Capital 0 0 0 0 N/A

Lazard presently has a consensus target price of $48.40, indicating a potential upside of 26.67%. Given Lazard’s higher possible upside, equities analysts clearly believe Lazard is more favorable than Alcentra Capital.

Earnings & Valuation

This table compares Lazard and Alcentra Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lazard $2.88 billion 1.72 $527.13 million $4.16 9.19
Alcentra Capital $28.97 million 3.49 $5.52 million $1.01 7.77

Lazard has higher revenue and earnings than Alcentra Capital. Alcentra Capital is trading at a lower price-to-earnings ratio than Lazard, indicating that it is currently the more affordable of the two stocks.

Dividends

Lazard pays an annual dividend of $1.76 per share and has a dividend yield of 4.6%. Alcentra Capital pays an annual dividend of $0.72 per share and has a dividend yield of 9.2%. Lazard pays out 42.3% of its earnings in the form of a dividend. Alcentra Capital pays out 71.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lazard has raised its dividend for 8 consecutive years.

Insider & Institutional Ownership

68.7% of Lazard shares are held by institutional investors. Comparatively, 29.8% of Alcentra Capital shares are held by institutional investors. 2.9% of Lazard shares are held by insiders. Comparatively, 0.6% of Alcentra Capital shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Lazard beats Alcentra Capital on 13 of the 16 factors compared between the two stocks.

About Lazard

Lazard Ltd, together with its subsidiaries, operates as a financial advisory and asset management firm worldwide. Its Financial Advisory segment offers various financial advisory services regarding mergers and acquisitions and other strategic matters, restructurings, capital structure, capital raising, shareholder advisory, and various other financial matters. This segment serves corporate, partnership, institutional, government, sovereign, and individual clients. The company's Asset Management segment offers a range of investment solutions and investment management services in equity and fixed income strategies; and alternative investments and private equity funds to corporations, public funds, sovereign entities, endowments and foundations, labor funds, financial intermediaries, and private clients. Lazard Ltd was founded in 1848 and is based in Hamilton, Bermuda.

About Alcentra Capital

Alcentra Capital Corporation is a business development company specializing in investments in lower middle-market companies. The fund seeks to invest in healthcare, business services, defense, government services, telecom and technology, media, infrastructure maintenance and logistics, and oil and gas services sector. It focuses on investment opportunities headquartered in the United States. The fund seeks to invest $5 million to $15 million per transaction in companies with EBITDA between $5 million to $15 million and revenues of between $10 million and $100 million. It invests in the form of subordinated debt and, to a lesser extent, senior debt and minority equity investments.

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