Apollo Global Management (APO) & Blackstone Group (BX) Critical Comparison

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Apollo Global Management (NYSE:APO) and Blackstone Group (NYSE:BX) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Dividends

Apollo Global Management pays an annual dividend of $2.24 per share and has a dividend yield of 7.1%. Blackstone Group pays an annual dividend of $1.48 per share and has a dividend yield of 3.8%. Apollo Global Management pays out -1,066.7% of its earnings in the form of a dividend. Blackstone Group pays out 65.5% 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. Apollo Global Management has increased its dividend for 2 consecutive years and Blackstone Group has increased its dividend for 6 consecutive years. Apollo Global Management is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Apollo Global Management and Blackstone Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Apollo Global Management $1.09 billion 5.79 -$10.38 million ($0.21) -150.24
Blackstone Group $6.83 billion 3.74 $1.54 billion $2.26 17.17

Blackstone Group has higher revenue and earnings than Apollo Global Management. Apollo Global Management is trading at a lower price-to-earnings ratio than Blackstone Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

72.7% of Apollo Global Management shares are owned by institutional investors. Comparatively, 51.4% of Blackstone Group shares are owned by institutional investors. 4.1% of Apollo Global Management shares are owned by insiders. Comparatively, 1.0% of Blackstone Group 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.

Profitability

This table compares Apollo Global Management and Blackstone Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apollo Global Management 19.45% 30.53% 9.85%
Blackstone Group 23.35% 12.74% 6.08%

Volatility & Risk

Apollo Global Management has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500. Comparatively, Blackstone Group has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Apollo Global Management and Blackstone Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apollo Global Management 0 2 3 1 2.83
Blackstone Group 0 1 10 0 2.91

Apollo Global Management presently has a consensus target price of $37.80, indicating a potential upside of 19.81%. Blackstone Group has a consensus target price of $43.59, indicating a potential upside of 12.35%. Given Apollo Global Management’s higher probable upside, research analysts plainly believe Apollo Global Management is more favorable than Blackstone Group.

Summary

Apollo Global Management beats Blackstone Group on 9 of the 17 factors compared between the two stocks.

Apollo Global Management Company Profile

Apollo Global Management, LLC is a publicly owned investment manager. The firm primarily provides its services to endowment and sovereign wealth funds, as well as other institutional and individual investors. It manages client focused portfolios. The firm launches and manages hedge funds for its clients. It also manages real estate funds and private equity funds for its clients. The firm invests in the fixed income and alternative investment markets across the globe. Its alternative investments include investment in private equity and real estate markets. The firm's private equity investments include traditional buyouts, recapitalization, distressed buyouts and debt investments in real estate, corporate partner buyouts, distressed asset, corporate carve-outs, middle market, growth capital, turnaround, bridge, corporate restructuring, special situation, acquisition, and industry consolidation transactions. Its fixed income investments include income-oriented senior loans, bonds, collateralized loan obligations, structured credit, opportunistic credit, non-performing loans, distressed debt, mezzanine debt, and value oriented fixed income securities. The firm seeks to invest in chemicals, commodities, consumer and retail, oil and gas, metals, mining, agriculture, commodities, distribution and transportation, financial and business services, manufacturing and industrial, media distribution, cable, entertainment and leisure, telecom, technology, natural resources, energy, packaging and materials, and satellite and wireless industries. It seeks to invest in companies based in across North America with a focus on United States, and Europe. The firm also makes investments outside North America, primarily in Western Europe and Asia. It employs a combination of contrarian, value, and distressed strategies to make its investments. The firm seeks to make investments in the range of $10 million and $1.5 billion. The firm seeks to invest in companies with Enterprise value between $200 million to $2.5 billion. The firm conducts an in-house research to create its investment portfolio. It seeks to acquire minority and majority positions in its portfolio companies. Apollo Global Management, LLC was founded in 1990 and is headquartered in New York City, with additional offices in New York City; Bethesda, Maryland; Chicago, Illinois; Los Angeles, California; Purchase, New York; Houston, Texas; London, United Kingdom; Frankfurt, Germany; Central, Hong Kong; Singapore; and Luxembourg.

Blackstone Group Company Profile

The Blackstone Group L.P. is a publicly owned alternative asset manager. The firm also provides capital markets services to its clients. It provides its services to public and corporate pension funds, academic, cultural, and charitable organizations, retirees, sovereign wealth funds, and institutional and individual investors. The firm manages separate client focused portfolios for its clients. It also launches and manages private equity funds, real estate funds, funds of hedge funds, collateralized loan obligations, real estate investment trusts, and credit-focused funds for its clients. The firm invests in private equity, public equity, fixed income, and alternative investment markets across the globe. The Blackstone Group L.P. was founded in 1985 and is based in New York City, New York with additional offices in London, United Kingdom, Hong Kong, Baltimore, Maryland, Beijing, China, Copenhagen, Denmark, Dusseldorf, Germany, Los Angeles, California, Paris, France, San Francisco, California, Sao Paulo, Brazil, Singapore, Sydney, Australia, and Tokyo, Japan.

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