Ares Management (NYSE:ARES) and Apollo Global Management (NYSE:APO) are both large-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.
Profitability
This table compares Ares Management and Apollo Global Management's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Ares Management | 7.22% | 16.07% | 2.09% |
| Apollo Global Management | N/A | 30.32% | 6.29% |
Dividends
Ares Management pays an annual dividend of $1.88 per share and has a dividend yield of 3.6%. Apollo Global Management pays an annual dividend of $2.40 per share and has a dividend yield of 4.2%. Ares Management pays out 112.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Apollo Global Management pays out 88.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ares Management has increased its dividend for 1 consecutive years. Apollo Global Management is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
42.4% of Ares Management shares are held by institutional investors. Comparatively, 72.0% of Apollo Global Management shares are held by institutional investors. 59.7% of Ares Management shares are held by company insiders. Comparatively, 9.3% of Apollo Global Management shares are held by company 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.
Earnings & Valuation
This table compares Ares Management and Apollo Global Management's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Ares Management | $1.77 billion | 7.78 | $148.88 million | $1.67 | 31.38 |
| Apollo Global Management | $2.93 billion | 4.54 | $843.19 million | $2.71 | 21.19 |
Apollo Global Management has higher revenue and earnings than Ares Management. Apollo Global Management is trading at a lower price-to-earnings ratio than Ares Management, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Ares Management has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Apollo Global Management has a beta of 1.62, meaning that its share price is 62% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and target prices for Ares Management and Apollo Global Management, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Ares Management | 0 | 4 | 4 | 0 | 2.50 |
| Apollo Global Management | 0 | 4 | 12 | 0 | 2.75 |
Ares Management presently has a consensus target price of $55.50, suggesting a potential upside of 5.90%. Apollo Global Management has a consensus target price of $57.3846, suggesting a potential downside of 0.06%. Given Ares Management's higher probable upside, analysts plainly believe Ares Management is more favorable than Apollo Global Management.
Summary
Apollo Global Management beats Ares Management on 11 of the 17 factors compared between the two stocks.
