Head-To-Head Analysis: Invesco (NYSE:IVZ) and Cannae (NYSE:CNNE)

Invesco (NYSE:IVZ) and Cannae (NYSE:CNNE) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, profitability, earnings and risk.

Volatility & Risk

Invesco has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500. Comparatively, Cannae has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Invesco	-6.92%	10.26%	4.09%
Cannae	-121.15%	-31.78%	-24.73%

Earnings and Valuation

This table compares Invesco and Cannae”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invesco	$6.38 billion	1.74	-$281.70 million	($1.60)	-15.61
Cannae	$423.60 million	1.40	-$513.20 million	($8.92)	-1.44

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

Dividends

Invesco pays an annual dividend of $0.84 per share and has a dividend yield of 3.4%. Cannae pays an annual dividend of $0.60 per share and has a dividend yield of 4.7%. Invesco pays out -52.5% of its earnings in the form of a dividend. Cannae pays out -6.7% 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.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Invesco and Cannae, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Invesco	0	10	5	0	2.33
Cannae	1	1	1	0	2.00

Invesco currently has a consensus target price of $27.46, indicating a potential upside of 9.97%. Cannae has a consensus target price of $17.00, indicating a potential upside of 32.36%. Given Cannae’s higher possible upside, analysts plainly believe Cannae is more favorable than Invesco.

Institutional and Insider Ownership

66.1% of Invesco shares are owned by institutional investors. Comparatively, 88.1% of Cannae shares are owned by institutional investors. 1.4% of Invesco shares are owned by company insiders. Comparatively, 10.9% of Cannae shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Invesco beats Cannae on 12 of the 17 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 Cannae

Cannae Holdings, Inc. is a principal investment firm. The firm primarily invests in restaurants, technology enabled healthcare services, financial services and more. It takes both minority and majority stakes. Cannae Holdings, Inc. was founded in 2014 and is based in Las Vegas, Nevada.