AllianceBernstein (NYSE:AB) and TPG (NASDAQ:TPG) Critical Analysis

AllianceBernstein (NYSE:ABGet Free Report) and TPG (NASDAQ:TPGGet Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for AllianceBernstein and TPG, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AllianceBernstein 0 0 4 0 3.00
TPG 0 6 4 0 2.40

AllianceBernstein currently has a consensus price target of $41.31, suggesting a potential upside of 47.12%. TPG has a consensus price target of $33.59, suggesting a potential downside of 3.59%. Given AllianceBernstein’s stronger consensus rating and higher possible upside, research analysts plainly believe AllianceBernstein is more favorable than TPG.

Institutional & Insider Ownership

14.3% of AllianceBernstein shares are held by institutional investors. Comparatively, 12.5% of TPG shares are held by institutional investors. 2.7% of AllianceBernstein shares are held by insiders. Comparatively, 78.7% of TPG 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.

Volatility and Risk

AllianceBernstein has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, TPG has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500.

Valuation and Earnings

This table compares AllianceBernstein and TPG’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AllianceBernstein $4.05 billion 0.77 $274.17 million $2.21 12.71
TPG $2.00 billion 5.38 -$56.24 million ($0.11) -316.70

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

Profitability

This table compares AllianceBernstein and TPG’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AllianceBernstein 6.14% 14.43% 14.43%
TPG 4.91% 19.78% 7.81%

Dividends

AllianceBernstein pays an annual dividend of $2.60 per share and has a dividend yield of 9.3%. TPG pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. AllianceBernstein pays out 117.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TPG pays out -799.9% of its earnings in the form of a dividend. AllianceBernstein has increased its dividend for 1 consecutive years. AllianceBernstein is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

AllianceBernstein beats TPG on 11 of the 16 factors compared between the two stocks.

About AllianceBernstein

(Get Free Report)

AllianceBernstein Holding L.P. is a publicly owned investment manager. The firm is a related adviser The firm manages separate client focused portfolios for its clients. The firm primarily invests in common and preferred stocks, warrants and convertible securities, government and corporate fxed-income securities, commodities, currencies, real estate-related assets and infation-protected securities. The firm employs quantitative analysis along with long-term purchases, short-term purchases, trading, short sales, margin transactions, option strategies including writing covered options, uncovered options and spread strategies to make its investments. The firm obtains external research to complement its in-house research. The firm was formerly known as Alliance Capital Management Holding LP. AllianceBernstein Holding L.P. was founded in 1967 and is based in Nashville,Tennessee.

About TPG

(Get Free Report)

TPG Inc. operates as an alternative asset manager in the United States and internationally. It offers investment management services to TPG Funds, limited partners, and other vehicles; monitoring services to portfolio companies; advisory, debt and equity arrangement, and underwriting and placement services; and capital structuring and other advisory services to portfolio companies. The company invests in private equity funds, real estate funds, hedge funds, and credit funds. TPG Inc. was founded in 1992 and is headquartered in Fort Worth, Texas. TPG Inc. is a subsidiary of TPG GP A, LLC.

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