Financial Review: WisdomTree Investments (WETF) versus Manning & Napier (MN)

Manning & Napier (NYSE: MN) and WisdomTree Investments (NASDAQ:WETF) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current ratings for Manning & Napier and WisdomTree Investments, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Manning & Napier 0 3 0 0 2.00
WisdomTree Investments 3 1 4 0 2.13

Manning & Napier currently has a consensus target price of $6.00, suggesting a potential upside of 64.38%. WisdomTree Investments has a consensus target price of $10.29, suggesting a potential upside of 10.60%. Given Manning & Napier’s higher possible upside, equities research analysts clearly believe Manning & Napier is more favorable than WisdomTree Investments.

Insider and Institutional Ownership

70.9% of Manning & Napier shares are held by institutional investors. Comparatively, 95.3% of WisdomTree Investments shares are held by institutional investors. 2.5% of Manning & Napier shares are held by company insiders. Comparatively, 16.1% of WisdomTree Investments shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Manning & Napier has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, WisdomTree Investments has a beta of 3.09, meaning that its stock price is 209% more volatile than the S&P 500.

Earnings and Valuation

This table compares Manning & Napier and WisdomTree Investments’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Manning & Napier $229.41 million 0.24 $80.46 million $0.53 6.89
WisdomTree Investments $212.91 million 5.88 $55.10 million $0.22 42.27

Manning & Napier has higher revenue and earnings than WisdomTree Investments. Manning & Napier is trading at a lower price-to-earnings ratio than WisdomTree Investments, indicating that it is currently the more affordable of the two stocks.

Dividends

Manning & Napier pays an annual dividend of $0.32 per share and has a dividend yield of 8.8%. WisdomTree Investments pays an annual dividend of $0.32 per share and has a dividend yield of 3.4%. Manning & Napier pays out 60.4% of its earnings in the form of a dividend. WisdomTree Investments pays out 145.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Manning & Napier is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Manning & Napier and WisdomTree Investments’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Manning & Napier 3.41% 34.28% 20.97%
WisdomTree Investments 21.42% 24.27% 20.44%

About Manning & Napier

Manning & Napier, Inc. is an independent investment management company. The Company operates through investment management industry segment. It provides a range of investment solutions through separately managed accounts, mutual funds and collective investment trust funds, as well as a range of consultative services. It offers equity, fixed income and alternative strategies, as well as a range of blended asset portfolios, such as life cycle funds. It serves a client base of high net worth individuals and institutions, including 401(k) plans, pension plans, Taft-Hartley plans (Taft-Hartley), endowments and foundations. It offers its investment management capabilities through direct sales to high net worth individuals and institutions, as well as through third-party intermediaries, platforms and institutional investment consultants. Its investment management offerings include approximately 40 separate account composites, and over 60 mutual funds and collective investment trusts.

About WisdomTree Investments

WisdomTree Investments, Inc. is an asset management company that focuses on exchange-traded funds (ETFs). The Company’s family of ETFs includes funds that track its own indexes, funds that track third party indexes and actively managed funds. It operates as an exchange traded products sponsor and asset manager providing investment advisory services in the United States, Europe, Canada and Japan. These activities are reported in its U.S. Business segment that comprises its the United States business and Japan sales office, which primarily engages in selling its United States listed ETFs to Japanese institutions, and International Business segment, that comprises its European business and Canadian business. Its United States listed products include International Hedged Equity ETFs, Equity ETFs, Fixed Income ETFs, Currency ETFs, Alternative Strategy ETFs and Commodity ETFs. Its portfolio of Non-the United States listed products include WisdomTree UCITS ETFs, Boost ETPs and Canadian ETFs.

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