Legg Mason (NYSE: LM) and UBS (NYSE:UBS) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.
Valuation and Earnings
This table compares Legg Mason and UBS’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Legg Mason||$2.89 billion||1.16||$227.25 million||$3.32||11.90|
|UBS||$43.95 billion||1.50||$1.07 billion||$1.07||15.97|
Legg Mason pays an annual dividend of $1.12 per share and has a dividend yield of 2.8%. UBS pays an annual dividend of $0.60 per share and has a dividend yield of 3.5%. Legg Mason pays out 33.7% of its earnings in the form of a dividend. UBS pays out 56.1% 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. Legg Mason has increased its dividend for 8 consecutive years.
Institutional and Insider Ownership
91.5% of Legg Mason shares are held by institutional investors. Comparatively, 36.7% of UBS shares are held by institutional investors. 12.7% of Legg Mason shares are held by insiders. Comparatively, 1.0% of UBS shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Legg Mason and UBS’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Legg Mason has a beta of 2.05, meaning that its share price is 105% more volatile than the S&P 500. Comparatively, UBS has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for Legg Mason and UBS, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Legg Mason currently has a consensus target price of $47.33, suggesting a potential upside of 19.77%. Given Legg Mason’s higher possible upside, research analysts clearly believe Legg Mason is more favorable than UBS.
Legg Mason beats UBS on 10 of the 17 factors compared between the two stocks.
Legg Mason Company Profile
Legg Mason, Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides investment management and related services to company-sponsored mutual funds and other investment vehicles including pension funds, foundations, endowments, sovereign wealth funds, insurance companies, private banks, family offices, individuals, as well as to global, institutional, and retail clients. It launches and manages equity, fixed income, and multi-asset customized portfolios through its subsidiaries. The firm also launches and manages mutual funds and exchange traded funds for its clients through its subsidiaries. It invests in private and public equity, fixed income, and multi asset markets across the globe through its subsidiaries. Through its subsidiaries, the firm also invests in alternative markets. It also employs a combination of fundamental and quantitative research to make its investments through its subsidiaries. Legg Mason, Inc. was founded in 1899 and is based in Baltimore, Maryland.
UBS Company Profile
UBS Group AG, together with its subsidiaries, provides financial advice and solutions worldwide. It operates through five divisions: Wealth Management, Wealth Management Americas, Personal & Corporate Banking, Asset Management, and Investment Bank. The Wealth Management division offers advisory and financial services to wealthy private clients. This segment provides banking and lending solutions, wealth planning, investment management solutions, and corporate finance advice. The Wealth Management Americas division offers wealth management solutions designed to address the needs of high and ultra high net worth clients. This division operates the United States and Canadian wealth management businesses; and international business booked in the United States. The Personal & Corporate Banking division provides financial products and services to private, corporate, and institutional clients in Switzerland. The Asset Management division offers investment management products and services comprising equities, asset allocation and currency investment strategies, hedge funds, fixed income products, real estate strategies, and infrastructure and private equity products; multi-manager hedge fund solutions and advisory services; and customized multi-asset solutions and advisory services. The Investment Bank division provides advisory, debt and equity capital market, and financing solutions, as well as risk management services, such as corporate lending and associated hedging for wealth management, personal and corporate banking, and asset management businesses serving the corporate, institutional, and wealth management clients. This division also offers cash, derivatives, and financing; foreign exchange, precious metals, rates, and credit; and securities research services. The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014. UBS Group AG was founded in 1862 and is headquartered in Zurich, Switzerland.
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