Analyzing Ares Management (NYSE:ARES) and Galaxy Digital (NASDAQ:GLXY)

Galaxy Digital (NASDAQ:GLXY) and Ares Management (NYSE:ARES) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Valuation and Earnings

This table compares Galaxy Digital and Ares Management”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Galaxy Digital	$61.36 billion	0.16	-$241.35 million	($0.65)	-37.54
Ares Management	$5.60 billion	7.78	$527.36 million	$2.18	60.52

Ares Management has lower revenue, but higher earnings than Galaxy Digital. Galaxy Digital is trading at a lower price-to-earnings ratio than Ares Management, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

50.0% of Ares Management shares are owned by institutional investors. 51.5% of Galaxy Digital shares are owned by insiders. Comparatively, 34.7% of Ares Management shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Galaxy Digital and Ares Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Galaxy Digital	-0.75%	-6.25%	-1.67%
Ares Management	10.63%	25.42%	6.35%

Volatility and Risk

Galaxy Digital has a beta of 5.1, indicating that its share price is 410% more volatile than the S&P 500. Comparatively, Ares Management has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Galaxy Digital and Ares Management, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Galaxy Digital	2	2	10	0	2.57
Ares Management	0	6	11	1	2.72

Galaxy Digital currently has a consensus price target of $39.58, suggesting a potential upside of 62.23%. Ares Management has a consensus price target of $160.47, suggesting a potential upside of 21.63%. Given Galaxy Digital’s higher possible upside, equities research analysts clearly believe Galaxy Digital is more favorable than Ares Management.

Summary

Ares Management beats Galaxy Digital on 11 of the 15 factors compared between the two stocks.

About Galaxy Digital

Galaxy Digital Holdings Ltd. is a financial services and an investment management company, which engages in the digital asset, cryptocurrency, and block chain technology sectors. It operates through the following segments: Trading, Principal Investment, Asset Management, Investment Banking, Mining, and Corporate & Other. The Trading segment manages positions in cryptocurrency and other liquid digital assets contributed to the business at the outset and continues to invest and trade in those and related assets. The Principal Investment segment includes portfolio of private principal investments across the block chain ecosystem, including early- and later-stage equity, pre-launch network contributions, and other structured alternative investments. The Asset Management segment manages capital on behalf of third parties in exchange for management fees and performance-based compensation. The Investment Banking segment offers the spectrum of investment banking, including, but not limited to general corporate advisory, mergers and acquisition, transaction advisory, restructuring and capital rising. The Mining segment focuses to provide financial services for North American miners, through its partnerships. The Corporate & Other consists of the partnership’s unallocated corporate overhead and other unallocated costs not identifiable to any of the reportable segments. The company was founded by Michael Edward Novogratz on February 10, 2006 and is headquartered in New York, NY.

About Ares Management

Ares Management Corporation operates as an alternative asset manager in the United States, Europe, and Asia. The company's Tradable Credit Group segment manages various types of investment funds, such as commingled and separately managed accounts for institutional investors, and publicly traded vehicles and sub-advised funds for retail investors in the tradable and non-investment grade corporate credit markets. Its Direct Lending Group segment provides financing solutions to small-to-medium sized companies. The company's Private Equity Group segment focuses on majority or shared-control investments primarily in under-capitalized companies. Its Real Estate Group segment invests in new developments and the repositioning of assets, with a focus on control or majority-control investments; and originates and invests in a range of self-originated financing opportunities for middle-market owners and operators of commercial real estate. The firm was previously known as Ares Management, L.P. Ares Management Corporation was founded in 1997 and is headquartered in Los Angeles, California with additional offices in the United States, Europe and Asia. Ares Management GP LLC is the general partner of the company.