Alcentra Capital (NASDAQ:ABDC) and Lazard (NYSE:LAZ) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.
Earnings and Valuation
This table compares Alcentra Capital and Lazard’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Alcentra Capital||$28.97 million||3.59||$5.52 million||$1.01||7.99|
|Lazard||$2.88 billion||1.68||$527.13 million||$4.16||8.95|
Risk & Volatility
Alcentra Capital has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Lazard has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.
Alcentra Capital pays an annual dividend of $0.72 per share and has a dividend yield of 8.9%. Lazard pays an annual dividend of $1.76 per share and has a dividend yield of 4.7%. Alcentra Capital pays out 71.3% of its earnings in the form of a dividend. Lazard pays out 42.3% 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 increased its dividend for 8 consecutive years.
This is a summary of current ratings for Alcentra Capital and Lazard, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lazard has a consensus price target of $48.40, suggesting a potential upside of 29.97%. Given Lazard’s higher possible upside, analysts clearly believe Lazard is more favorable than Alcentra Capital.
Insider and Institutional Ownership
29.8% of Alcentra Capital shares are owned by institutional investors. Comparatively, 68.7% of Lazard shares are owned by institutional investors. 0.6% of Alcentra Capital shares are owned by insiders. Comparatively, 2.9% of Lazard shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This table compares Alcentra Capital and Lazard’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Lazard beats Alcentra Capital on 13 of the 16 factors compared between the two stocks.
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.
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.
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