Head-To-Head Review: Eaton Vance (EV) vs. AllianceBernstein (AB)

Eaton Vance (NYSE: EV) and AllianceBernstein (NYSE:AB) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Volatility & Risk

Eaton Vance has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500. Comparatively, AllianceBernstein has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500.

Institutional & Insider Ownership

69.1% of Eaton Vance shares are owned by institutional investors. Comparatively, 20.8% of AllianceBernstein shares are owned by institutional investors. 2.7% of AllianceBernstein shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for Eaton Vance and AllianceBernstein, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eaton Vance 0 5 2 0 2.29
AllianceBernstein 0 1 4 0 2.80

Eaton Vance presently has a consensus target price of $51.36, indicating a potential downside of 7.55%. AllianceBernstein has a consensus target price of $27.50, indicating a potential upside of 10.66%. Given AllianceBernstein’s stronger consensus rating and higher probable upside, analysts clearly believe AllianceBernstein is more favorable than Eaton Vance.

Dividends

Eaton Vance pays an annual dividend of $1.24 per share and has a dividend yield of 2.2%. AllianceBernstein pays an annual dividend of $2.04 per share and has a dividend yield of 8.2%. Eaton Vance pays out 51.2% of its earnings in the form of a dividend. AllianceBernstein pays out 96.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eaton Vance has increased its dividend for 36 consecutive years.

Valuation & Earnings

This table compares Eaton Vance and AllianceBernstein’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Eaton Vance $1.53 billion 4.29 $282.13 million $2.42 22.95
AllianceBernstein $3.03 billion 0.77 $216.58 million $2.12 11.72

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

Profitability

This table compares Eaton Vance and AllianceBernstein’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eaton Vance 18.45% 33.45% 13.84%
AllianceBernstein 6.38% 13.72% 13.72%

Summary

Eaton Vance beats AllianceBernstein on 11 of the 17 factors compared between the two stocks.

Eaton Vance Company Profile

Eaton Vance Corp. is engaged in the business of managing investment funds and providing investment management and advisory services to high-net-worth individuals and institutions. The Company operates as an investment advisor to funds and separate accounts. The Company, through its subsidiaries and other affiliates, manages active equity, income and alternative strategies across a range of investment styles and asset classes, including the United States and global equities, floating-rate bank loans, municipal bonds, global income, high-yield and investment grade bonds. Through its subsidiary, the Company also manages a range of engineered alpha strategies, including systematic equity, systematic alternatives and managed options strategies. The Company’s open-end fund lineup includes tax-managed equity funds, and non-tax-managed equity and multi-asset funds. The Company’s family of closed-end funds includes municipal bond, domestic and global equity, and bank loan.

AllianceBernstein Company Profile

AllianceBernstein Holding L.P. is engaged in providing research, investment management and related services to a range of clients through its three buy-side distribution channels: Institutions, Retail and Private Wealth Management, and its sell-side business, Bernstein Research Services. The Company offers a range of investment services, including equity strategies, with global and regional portfolios across capitalization ranges and investment strategies, including value, growth and equities; traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies; passive management, including index and enhanced index strategies; alternative investments, including hedge funds, fund of funds and private equity, and multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds. The Company’s services span various investment disciplines, including market capitalization, term and geographic locations.

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