U.S. Global Investors, Inc. (NASDAQ:GROW) and Altaba Inc. (NASDAQ:AABA) are both Financial companies that recently hit new low. This price action has ruffled more than a few feathers in the investment community, but is one a better investment than the other? To answer this, we will compare the two companies across growth, profitability, risk, return, dividends, and valuation measures.
U.S. Global Investors, Inc. (NASDAQ:GROW) operates in the Asset Management segment of the Financial sector. The company has grown sales at a -21.30% annual rate over the past five years, putting it in the low growth category. GROW has a net profit margin of -0.10% and is less profitable than the average company in the Asset Management industry. In terms of efficiency, GROW has an asset turnover ratio of 0.51. This figure represents the amount of revenue a company generates per dollar of assets. GROW’s financial leverage ratio is 0.05, which indicates that the company’s asset base is primarily funded by equity capital. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is 0.00%, which is worse than the Asset Management industry average ROE.
U.S. Global Investors, Inc. (GROW) pays out an annual dividend of 0.03 per share. At the current valuation, this equates to a dividend yield of 0.61%.Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is 0. Company trades at a P/E ratio of 148.79 , and is more expensive than the average stock in the Asset Management industry.
Over the past three months, U.S. Global Investors, Inc. insiders have been net sellers, acquiring a net of 18,525 shares. This implies that insiders have been feeling relatively bullish about the outlook for GROW. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. GROW has a beta of 0.38 and therefore an below average level of market volatility.
Altaba Inc. (NASDAQ:AABA) operates in the Asset Management segment of the Financial sector. AABA has increased sales at a 0.70% CAGR over the past five years, and is considered a low growth stock. The company has a net profit margin of 28.80% and is more profitable than the average Asset Management player. AABA’s return on equity of 1.10% is worse than the Asset Management industry average.
Stock has a payout ratio of 0.00%. According to this ratio, AABA should be able to continue making payouts at these levels. The company trades at a free cash flow yield of 0.22 and has a P/E of 38.96. Compared to the average company in the 14.82 space, AABA is relatively expensive. The average analyst recommendation for AABA is 2.00, or a buy.
Altaba Inc. insiders have sold a net of 0 shares during the past three months, which implies that the company’s top executives have been feeling bearish about the stock’s outlook. Finally, AABA’s beta of 1.90 indicates that the stock has an below average level of market risk.