Critical Contrast: GCM Grosvenor (NASDAQ:GCMG) and Westwood Holdings Group (NYSE:WHG)

Westwood Holdings Group (NYSE:WHG) and GCM Grosvenor (NASDAQ:GCMG) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.

Dividends

Westwood Holdings Group pays an annual dividend of $0.60 per share and has a dividend yield of 3.9%. GCM Grosvenor pays an annual dividend of $0.44 per share and has a dividend yield of 3.3%. Westwood Holdings Group pays out 240.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GCM Grosvenor pays out 1,466.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Westwood Holdings Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

56.6% of Westwood Holdings Group shares are held by institutional investors. Comparatively, 99.9% of GCM Grosvenor shares are held by institutional investors. 10.1% of Westwood Holdings Group shares are held by company insiders. Comparatively, 77.3% of GCM Grosvenor shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Westwood Holdings Group and GCM Grosvenor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westwood Holdings Group	2.33%	2.66%	2.17%
GCM Grosvenor	3.64%	-101.23%	19.27%

Analyst Ratings

This is a summary of current ratings and recommmendations for Westwood Holdings Group and GCM Grosvenor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westwood Holdings Group	0	0	0	0	0.00
GCM Grosvenor	0	3	2	0	2.40

GCM Grosvenor has a consensus price target of $14.10, indicating a potential upside of 6.33%. Given GCM Grosvenor’s stronger consensus rating and higher possible upside, analysts plainly believe GCM Grosvenor is more favorable than Westwood Holdings Group.

Volatility and Risk

Westwood Holdings Group has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, GCM Grosvenor has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Valuation and Earnings

This table compares Westwood Holdings Group and GCM Grosvenor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westwood Holdings Group	$94.72 million	1.54	$2.21 million	$0.25	62.20
GCM Grosvenor	$523.47 million	4.79	$18.69 million	$0.03	442.00

GCM Grosvenor has higher revenue and earnings than Westwood Holdings Group. Westwood Holdings Group is trading at a lower price-to-earnings ratio than GCM Grosvenor, indicating that it is currently the more affordable of the two stocks.

Summary

GCM Grosvenor beats Westwood Holdings Group on 11 of the 16 factors compared between the two stocks.

About Westwood Holdings Group

Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.

About GCM Grosvenor

GCM Grosvenor Inc. is global alternative asset management solutions provider. The firm primarily provides its services to pooled investment vehicles. It also provides its services to investment companies, high net worth individuals, pension and profit sharing plans and state or municipal government entities. The firm invests in equity and alternative investment markets of the United States and internationally. The firm invests in multi-strategy, credit-focused, equity-focused, macro-focused, commodity-focused, and other specialty portfolios. It focuses in hedge fund asset classes, private equity, real estate, and/or infrastructure, credit and absolute return strategies. It also focuses in primary fund investments, secondary fund investments, and co-investments with a focus on buyout, distressed debt, mezzanine, venture capital/growth equity investments. The firm seeks to do seed investments in small, emerging, and diverse private equity firms. The firm seeks to make regionally-focused investments in middle-market buyout. It prefers to invest in aerospace and defense, advanced electronics, information technology, biosciences, and advanced materials. It focuses on Ohio and the Midwest region. The firm employs fundamental and quantitative analysis. GCM Grosvenor Inc. was founded in 1971 and is based in Chicago, Illinois with additional offices in North America, Asia, Australia and Europe.