Head-To-Head Analysis: Brookfield Asset Management (NYSE:BAM) and Fidus Investment (NASDAQ:FDUS)

Fidus Investment (NASDAQ:FDUS) and Brookfield Asset Management (NYSE:BAM) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Valuation and Earnings

This table compares Fidus Investment and Brookfield Asset Management’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidus Investment	$106.93 million	5.87	$77.13 million	$2.91	6.84
Brookfield Asset Management	$390.00 million	46.74	$451.00 million	$1.08	38.04

Brookfield Asset Management has higher revenue and earnings than Fidus Investment. Fidus Investment is trading at a lower price-to-earnings ratio than Brookfield Asset Management, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Fidus Investment and Brookfield Asset Management, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidus Investment	0	2	0	0	2.00
Brookfield Asset Management	1	5	5	0	2.36

Fidus Investment presently has a consensus price target of $22.00, suggesting a potential upside of 10.61%. Brookfield Asset Management has a consensus price target of $42.46, suggesting a potential upside of 3.36%. Given Fidus Investment’s higher possible upside, equities analysts plainly believe Fidus Investment is more favorable than Brookfield Asset Management.

Insider & Institutional Ownership

28.1% of Fidus Investment shares are owned by institutional investors. Comparatively, 68.4% of Brookfield Asset Management shares are owned by institutional investors. 1.4% of Fidus Investment shares are owned by insiders. Comparatively, 11.0% of Brookfield Asset Management shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Fidus Investment and Brookfield Asset Management’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fidus Investment	67.43%	12.63%	6.88%
Brookfield Asset Management	49.36%	98.98%	67.65%

Volatility & Risk

Fidus Investment has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Brookfield Asset Management has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500.

Dividends

Fidus Investment pays an annual dividend of $1.72 per share and has a dividend yield of 8.6%. Brookfield Asset Management pays an annual dividend of $1.52 per share and has a dividend yield of 3.7%. Fidus Investment pays out 59.1% of its earnings in the form of a dividend. Brookfield Asset Management pays out 140.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fidus Investment is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Brookfield Asset Management beats Fidus Investment on 11 of the 16 factors compared between the two stocks.

About Fidus Investment

Fidus Investment Corporation is a business development company. It specializing in leveraged buyouts, refinancings, change of ownership transactions, recapitalizations, strategic acquisitions, mezzanine, growth capital, business expansion, lower middle market investments, debt investments, subordinated and second lien loans, senior secured and unitranche debt, preferred equity, warrants, subordinated debt, senior subordinated notes, junior secured loans, and unitranche loans. It does not invest in turnarounds or distressed situations. The fund prefers to invest in aerospace and defense, business services, consumer products and services including retail, food, and beverage, healthcare products and services, industrial products and services, information technology services, niche manufacturing, transportation and logistics, and value-added distribution sectors. It seeks to invest in companies based in United States. The fund typically invests between $5 million and $15 million per transaction in companies with annual revenues between $10 million and $150 million and an annual EBITDA between $3 million and $20 million, but it can occasionally invest in larger or smaller companies. It seeks to acquire minority equity stakes and board observation rights in conjunction with its investments.

About Brookfield Asset Management

Brookfield Asset Management Ltd. is a real estate investment firm specializing in alternative asset management services. Its renewable power and transition business includes the operates in the hydroelectric, wind, solar, distributed generation, and sustainable solution sector. The company's infrastructure business engages in the utilities, transport, midstream, and data infrastructure sectors. In addition, its private equity business offers industrial, infrastructure, and business services sectors; and real estate business, which includes housing, logistics, hospitality, science and innovation, office, and retail sectors. Further, it provides credit business; and insurance solution in the reinsurance, annuities, operating platform, and investment solutions sectors. Brookfield Asset Management Ltd. was incorporated in 2022 and is headquartered in Toronto, Canada.