Reviewing Invesco (NYSE:IVZ) & BlackRock (NYSE:BLK)

Invesco (NYSE:IVZ) and BlackRock (NYSE:BLK) are both large-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

66.1% of Invesco shares are held by institutional investors. Comparatively, 80.7% of BlackRock shares are held by institutional investors. 1.2% of Invesco shares are held by insiders. Comparatively, 2.0% of BlackRock shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Invesco pays an annual dividend of $0.84 per share and has a dividend yield of 3.4%. BlackRock pays an annual dividend of $20.84 per share and has a dividend yield of 1.9%. Invesco pays out 57.1% of its earnings in the form of a dividend. BlackRock pays out 53.6% 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. Invesco has raised its dividend for 5 consecutive years and BlackRock has raised its dividend for 16 consecutive years.

Analyst Recommendations

This is a summary of current recommendations for Invesco and BlackRock, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Invesco	0	11	5	1	2.41
BlackRock	0	3	17	0	2.85

Invesco presently has a consensus price target of $23.63, indicating a potential downside of 3.14%. BlackRock has a consensus price target of $1,302.59, indicating a potential upside of 20.59%. Given BlackRock’s stronger consensus rating and higher probable upside, analysts clearly believe BlackRock is more favorable than Invesco.

Profitability

This table compares Invesco and BlackRock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Invesco	14.15%	9.11%	3.69%
BlackRock	26.64%	14.80%	5.04%

Volatility & Risk

Invesco has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500. Comparatively, BlackRock has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Valuation and Earnings

This table compares Invesco and BlackRock”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invesco	$6.07 billion	1.79	$774.80 million	$1.47	16.60
BlackRock	$20.41 billion	8.21	$6.37 billion	$38.89	27.77

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

Summary

BlackRock beats Invesco on 15 of the 18 factors compared between the two stocks.

About Invesco

Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

About BlackRock

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.