Comparing Victory Capital (NASDAQ:VCTR) and T. Rowe Price Group (NASDAQ:TROW)

T. Rowe Price Group (NASDAQ:TROW) and Victory Capital (NASDAQ:VCTR) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

73.4% of T. Rowe Price Group shares are held by institutional investors. Comparatively, 87.7% of Victory Capital shares are held by institutional investors. 1.6% of T. Rowe Price Group shares are held by company insiders. Comparatively, 9.4% of Victory Capital 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.

Valuation and Earnings

This table compares T. Rowe Price Group and Victory Capital”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
T. Rowe Price Group	$7.09 billion	3.29	$2.10 billion	$9.18	11.64
Victory Capital	$893.48 million	5.01	$288.86 million	$3.92	17.58

T. Rowe Price Group has higher revenue and earnings than Victory Capital. T. Rowe Price Group is trading at a lower price-to-earnings ratio than Victory Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for T. Rowe Price Group and Victory Capital, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
T. Rowe Price Group	4	12	0	0	1.75
Victory Capital	0	5	6	0	2.55

T. Rowe Price Group currently has a consensus price target of $108.31, indicating a potential upside of 1.37%. Victory Capital has a consensus price target of $75.00, indicating a potential upside of 8.81%. Given Victory Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Victory Capital is more favorable than T. Rowe Price Group.

Profitability

This table compares T. Rowe Price Group and Victory Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
T. Rowe Price Group	28.89%	19.95%	15.09%
Victory Capital	25.27%	24.23%	12.71%

Volatility & Risk

T. Rowe Price Group has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500. Comparatively, Victory Capital has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500.

Dividends

T. Rowe Price Group pays an annual dividend of $5.08 per share and has a dividend yield of 4.8%. Victory Capital pays an annual dividend of $1.96 per share and has a dividend yield of 2.8%. T. Rowe Price Group pays out 55.3% of its earnings in the form of a dividend. Victory Capital pays out 50.0% 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. T. Rowe Price Group has increased its dividend for 39 consecutive years and Victory Capital has increased its dividend for 6 consecutive years. T. Rowe Price Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Victory Capital beats T. Rowe Price Group on 9 of the 17 factors compared between the two stocks.

About T. Rowe Price Group

T. Rowe Price Group, Inc. is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe. It employs fundamental and quantitative analysis with a bottom-up approach. The firm utilizes in-house and external research to make its investments. It employs socially responsible investing with a focus on environmental, social, and governance issues. It makes investment in late-stage venture capital transactions and usually invests between $3 million and $5 million. The firm was previously known as T. Rowe Group, Inc. and T. Rowe Price Associates, Inc. T. Rowe Price Group, Inc. was founded in 1937 and is based in Baltimore, Maryland, with additional offices in Colorado Springs, Colorado; Owings Mills, Maryland; San Francisco, California; New York, New York; Philadelphia, Pennsylvania; Tampa, Florida; Toronto, Ontario; Hellerup, Denmark; Amsterdam, The Netherlands; Luxembourg, Grand Duchy of Luxembourg; Zurich, Switzerland; Dubai, United Arab Emirates; London, United Kingdom; Sydney, New South Wales; Hong Kong; Tokyo, Japan; Singapore; Frankfurt, Shanghai, China; Germany, Madrid, Spain, Milan, Italy, Stockholm, Sweden, Melbourne, Australia, Amsterdam, Netherlands and Washington, DC.

About Victory Capital

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an asset management company in the United States and internationally. It offers investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution, and other management services. The company provides specialized investment strategies to institutions, intermediaries, retirement platforms, and individual investors. Its investment products include actively and passively managed mutual funds; rules-based and active exchange traded funds; institutional separate accounts; variable insurance products; alternative investments; and private closed-end funds; and a 529 Education Savings Plan. The company also offers strategies through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts, unified managed accounts through wrap account programs, Collective Investment Trusts, and undertakings for the collective investment in transferable securities. Victory Capital Holdings, Inc. was incorporated in 2013 and is based in San Antonio, Texas.