Analyzing WisdomTree (NYSE:WT) and TPG (NASDAQ:TPG)

WisdomTree (NYSE:WT) and TPG (NASDAQ:TPG) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Insider & Institutional Ownership

78.6% of WisdomTree shares are owned by institutional investors. Comparatively, 94.0% of TPG shares are owned by institutional investors. 10.1% of WisdomTree shares are owned by insiders. Comparatively, 61.4% of TPG shares are owned by 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 & Earnings

This table compares WisdomTree and TPG”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WisdomTree	$493.75 million	7.41	$109.13 million	$0.52	46.42
TPG	$4.67 billion	3.95	$184.59 million	$0.66	72.78

TPG has higher revenue and earnings than WisdomTree. WisdomTree is trading at a lower price-to-earnings ratio than TPG, indicating that it is currently the more affordable of the two stocks.

Dividends

WisdomTree pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. TPG pays an annual dividend of $2.36 per share and has a dividend yield of 4.9%. WisdomTree pays out 23.1% of its earnings in the form of a dividend. TPG pays out 357.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of recent ratings for WisdomTree and TPG, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WisdomTree	0	4	3	0	2.43
TPG	0	4	13	0	2.76

WisdomTree currently has a consensus price target of $23.66, indicating a potential downside of 1.99%. TPG has a consensus price target of $63.33, indicating a potential upside of 31.84%. Given TPG’s stronger consensus rating and higher probable upside, analysts plainly believe TPG is more favorable than WisdomTree.

Profitability

This table compares WisdomTree and TPG’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WisdomTree	13.27%	39.12%	10.29%
TPG	4.67%	28.10%	8.03%

Volatility and Risk

WisdomTree has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, TPG has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Summary

TPG beats WisdomTree on 11 of the 16 factors compared between the two stocks.

About WisdomTree

WisdomTree, Inc., through its subsidiaries, operates as an exchange-traded funds (ETFs) sponsor and asset manager. It offers ETFs in equities, currency, fixed income, and alternatives asset classes. The company also licenses its indexes to third parties for proprietary products, as well as offers a platform to promote the use of WisdomTree ETFs in 401(k) plans. It develops index using its fundamentally weighted index methodology. In addition, the company provides investment advisory services. The company was founded in 1985 and is based in New York, New York.

About TPG

TPG Inc. operates as an alternative asset manager in the United States and internationally. The company offers investment management services to TPG Funds, limited partners, and other vehicles. It also offers monitoring services to portfolio companies; advisory, debt and equity arrangement, and underwriting and placement services; and capital structuring and other advisory services to portfolio companies. In addition, the company invests in private equity funds, real estate funds, hedge funds, and credit funds. TPG Inc. was founded in 1992 and is based in Fort Worth, Texas. The company operates as a subsidiary of TPG GP A, LLC.