TPG (NASDAQ:TPG) versus Victory Capital (NASDAQ:VCTR) Critical Review

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

Dividends

TPG pays an annual dividend of $1.52 per share and has a dividend yield of 2.4%. Victory Capital pays an annual dividend of $1.64 per share and has a dividend yield of 2.6%. TPG pays out -447.0% of its earnings in the form of a dividend. Victory Capital pays out 40.8% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TPG	0.69%	23.45%	7.85%
Victory Capital	30.82%	29.92%	12.99%

Earnings and Valuation

This table compares TPG and Victory Capital”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TPG	$2.39 billion	9.87	$80.09 million	($0.34)	-190.20
Victory Capital	$821.03 million	4.99	$213.16 million	$4.02	15.72

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

Risk and Volatility

TPG has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Victory Capital has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for TPG and Victory Capital, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TPG	0	7	6	0	2.46
Victory Capital	0	4	5	0	2.56

TPG currently has a consensus target price of $57.67, indicating a potential downside of 10.83%. Victory Capital has a consensus target price of $63.67, indicating a potential upside of 0.74%. Given Victory Capital’s stronger consensus rating and higher possible upside, analysts clearly believe Victory Capital is more favorable than TPG.

Insider and Institutional Ownership

86.8% of TPG shares are held by institutional investors. Comparatively, 87.7% of Victory Capital shares are held by institutional investors. 76.5% of TPG shares are held by insiders. Comparatively, 9.8% of Victory Capital shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Victory Capital beats TPG on 9 of the 15 factors compared between the two stocks.

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.

About Victory Capital

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an asset management company in the United States and internationally. It offers investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution, and other management services. The company provides specialized investment strategies to institutions, intermediaries, retirement platforms, and individual investors. Its investment products include actively and passively managed mutual funds; rules-based and active exchange traded funds; institutional separate accounts; variable insurance products; alternative investments; and private closed-end funds; and a 529 Education Savings Plan. The company also offers strategies through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts, unified managed accounts through wrap account programs, Collective Investment Trusts, and undertakings for the collective investment in transferable securities. Victory Capital Holdings, Inc. was incorporated in 2013 and is based in San Antonio, Texas.