Analyzing Och-Ziff Capital Management Group (OZM) & Financial Engines (FNGN)

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Och-Ziff Capital Management Group (NASDAQ: FNGN) and Financial Engines (NASDAQ:FNGN) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Profitability

This table compares Och-Ziff Capital Management Group and Financial Engines’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Och-Ziff Capital Management Group 0.44% -341.23% 15.98%
Financial Engines 10.53% 8.80% 8.12%

Earnings and Valuation

This table compares Och-Ziff Capital Management Group and Financial Engines’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Och-Ziff Capital Management Group $858.34 million 0.99 $21.07 million $0.51 3.37
Financial Engines $480.51 million 5.96 $46.66 million $1.03 43.64

Financial Engines has lower revenue, but higher earnings than Och-Ziff Capital Management Group. Och-Ziff Capital Management Group is trading at a lower price-to-earnings ratio than Financial Engines, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Och-Ziff Capital Management Group and Financial Engines, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Och-Ziff Capital Management Group 0 2 1 0 2.33
Financial Engines 0 6 0 0 2.00

Och-Ziff Capital Management Group presently has a consensus target price of $4.00, indicating a potential upside of 132.56%. Financial Engines has a consensus target price of $38.67, indicating a potential downside of 13.98%. Given Och-Ziff Capital Management Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Och-Ziff Capital Management Group is more favorable than Financial Engines.

Insider & Institutional Ownership

16.2% of Och-Ziff Capital Management Group shares are owned by institutional investors. Comparatively, 99.8% of Financial Engines shares are owned by institutional investors. 62.3% of Och-Ziff Capital Management Group shares are owned by insiders. Comparatively, 3.0% of Financial Engines shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Och-Ziff Capital Management Group pays an annual dividend of $0.08 per share and has a dividend yield of 4.7%. Financial Engines pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Och-Ziff Capital Management Group pays out 15.7% of its earnings in the form of a dividend. Financial Engines pays out 31.1% 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. Och-Ziff Capital Management Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Och-Ziff Capital Management Group has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, Financial Engines has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

About Och-Ziff Capital Management Group

Och-Ziff Capital Management Group LLC is a publicly owned hedge fund sponsor. The firm provides investment advisory services for its clients. It primarily caters to institutional investors which include pension funds, fund-of-funds, foundations and endowments, corporations and other institutions, private banks and family offices. The firm invests in equity and alternative markets across the world. It employs quantitative and qualitative analysis to make its investments. For its multi-strategy portfolios, the firm employs strategies like convertible and derivative arbitrage, corporate credit, long/short equity special situations, buyout investments, merger arbitrage, private investments, and structured credit. It also invests in real estate and traditional real estate assets including multifamily, office, hotel and retail, loans, portfolio acquisitions, loan pools, operating companies, structured debt products, public securities, and non-traditional real estate assets including gaming, distressed land and residential, cell towers, parking, golf, debt and senior housing. For private equity investments, it considers investments in a variety of special situations that seek to realize value through strategic sales or initial public offerings. The firm typically invests in the energy investments. It prefers to invest in United States. It also manages a buyout fund, Och-Ziff Energy Fund. Och-Ziff Capital Management Group LLC was founded in 1994 and is based New York City with additional offices in Houston, Texas, London, United Kingdom, Hong Kong, Tokyo, Japan, Bangalore, India, Singapore, and Beijing, China.

About Financial Engines

Financial Engines, Inc. provides independent technology-enabled financial advisory, discretionary portfolio management, personalized investment advice, financial and retirement income planning, and financial education and guidance services in the United States. It assists individuals to develop a strategy to reach financial goals by offering a set of services, including personalized plans for saving and investing, assessments of retirement income, and the option to meet face-to-face with a financial advisor. The company's products and services include Professional Management that provides discretionary portfolio management service for individuals in the workplace who want affordable and personalized portfolio management for their retirement accounts; Personal Advisor, which offers discretionary portfolio management for 401(k), IRA, and taxable accounts for defined contribution (DC) plan participants and individual retail investors; and Online Advice, an Internet-based investment advisory service designed for individuals who wish to take an active role in personally managing their portfolios. Its products and services also comprise Financial Planning and Retirement Income Planning services, including social security guidance; and Financial Wellness, which offers a range of financial education and guidance through multiple channels, including in person, on-site events, online content, and phone-based advisors. The company delivers its services to plan sponsors and plan participants primarily through connections to nine DC plan providers. Financial Engines, Inc. was founded in 1996 and is headquartered in Sunnyvale, California.

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