Financial Analysis: The Carlyle Group (NASDAQ:CG) vs. U.S. Global Investors (NASDAQ:GROW)

The Carlyle Group (NASDAQ:CG) and U.S. Global Investors (NASDAQ:GROW) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Profitability

This table compares The Carlyle Group and U.S. Global Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Carlyle Group	18.81%	24.02%	6.53%
U.S. Global Investors	5.40%	1.05%	0.99%

Volatility & Risk

The Carlyle Group has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500. Comparatively, U.S. Global Investors has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for The Carlyle Group and U.S. Global Investors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Carlyle Group	1	8	7	0	2.38
U.S. Global Investors	0	0	0	0	0.00

The Carlyle Group currently has a consensus target price of $52.33, indicating a potential upside of 12.04%. Given The Carlyle Group’s stronger consensus rating and higher probable upside, analysts plainly believe The Carlyle Group is more favorable than U.S. Global Investors.

Institutional and Insider Ownership

55.9% of The Carlyle Group shares are held by institutional investors. Comparatively, 23.6% of U.S. Global Investors shares are held by institutional investors. 27.2% of The Carlyle Group shares are held by insiders. Comparatively, 19.2% of U.S. Global Investors shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

The Carlyle Group pays an annual dividend of $1.40 per share and has a dividend yield of 3.0%. U.S. Global Investors pays an annual dividend of $0.09 per share and has a dividend yield of 4.1%. The Carlyle Group pays out 47.5% of its earnings in the form of a dividend. U.S. Global Investors pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Carlyle Group has increased its dividend for 4 consecutive years.

Earnings & Valuation

This table compares The Carlyle Group and U.S. Global Investors”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Carlyle Group	$3.47 billion	4.86	$1.02 billion	$2.95	15.83
U.S. Global Investors	$8.93 million	3.32	$1.33 million	$0.03	74.00

The Carlyle Group has higher revenue and earnings than U.S. Global Investors. The Carlyle Group is trading at a lower price-to-earnings ratio than U.S. Global Investors, indicating that it is currently the more affordable of the two stocks.

Summary

The Carlyle Group beats U.S. Global Investors on 15 of the 17 factors compared between the two stocks.

About The Carlyle Group

The Carlyle Group Inc. is an investment firm specializing in direct and fund of fund investments. Within direct investments, it specializes in management-led/ Leveraged buyouts, privatizations, divestitures, strategic minority equity investments, structured credit, global distressed and corporate opportunities, small and middle market, equity private placements, consolidations and buildups, senior debt, mezzanine and leveraged finance, and venture and growth capital financings, seed/startup, early venture, emerging growth, turnaround, mid venture, late venture, PIPES. The firm invests across four segments which include Corporate Private Equity, Real Assets, Global Market Strategies, and Solutions. The firm typically invests in industrial, agribusiness, ecological sector, fintech, airports, parking, Plastics, Rubber, diversified natural resources, minerals, farming, aerospace, defense, automotive, consumer, retail, industrial, infrastructure, energy, power, healthcare, software, software enabled services, semiconductors, communications infrastructure, financial technology, utilities, gaming, systems and related supply chain, electronic systems, systems, oil and gas, processing facilities, power generation assets, technology, systems, real estate, financial services, transportation, business services, telecommunications, media, and logistics sectors. Within the industrial sector, the firm invests in manufacturing, building products, packaging, chemicals, metals and mining, forestry and paper products, and industrial consumables and services. In consumer and retail sectors, it invests in food and beverage, retail, restaurants, consumer products, domestic consumption, consumer services, personal care products, direct marketing, and education. Within aerospace, defense, business services, and government services sectors, it seeks to invest in defense electronics, manufacturing and services, government contracting and services, information technology, distribution companies. In telecommunication and media sectors, it invests in cable TV, directories, publishing, entertainment and content delivery services, wireless infrastructure/services, fixed line networks, satellite services, broadband and Internet, and infrastructure. Within real estate, the firm invests in office, hotel, industrial, retail, for sale residential, student housing, hospitality, multifamily residential, homebuilding and building products, and senior living sectors. The firm seeks to make investments in growing business including those with overleveraged balance sheets. The firm seeks to hold its investments for four to six years. In the healthcare sector, it invests in healthcare services, outsourcing services, companies running clinical trials for pharmaceutical companies, managed care, pharmaceuticals, pharmaceutical related services, healthcare IT, medical, products, and devices. It seeks to invest in companies based in Sub-Saharan focusing on Ghana, Kenya, Mozambique, Botswana, Nigeria, Uganda, West Africa, North Africa and South Africa focusing on Tanzania and Zambia; Asia focusing on Pakistan, India, South East Asia, Indonesia, Philippines, Vietnam, Korea, and Japan; Australia; New Zealand; Europe focusing on France, Italy, Denmark, United Kingdom, Germany, Austria, Belgium, Finland, Iceland, Ireland, Netherlands, Norway, Portugal, Spain, Benelux , Sweden, Switzerland, Hungary, Poland, and Russia; Middle East focusing on Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Turkey, and UAE; North America focusing on United States which further invest in Southeastern United States, Texas, Boston, San Francisco Bay Area and Pacific Northwest; Asia Pacific; Soviet Union, Central-Eastern Europe, and Israel; Nordic region; and South America focusing on Mexico, Argentina, Brazil, Chile, and Peru. The firm seeks to invest in food, financial, and healthcare industries in Western China. In the real estate sector, the firm seeks to invest in various locations across Europe focusing on France and Central Europe, United States, Asia focusing on China, and Latin America. It typically invests between $1 million and $50 million for venture investments and between $50 million and $2 billion for buyouts in companies with enterprise value of between $31.57 million and $1000 million and sales value of $10 million and $500 million. It seeks to invest in companies with market capitalization greater than $50 million and EBITDA between $5 million to $25 million. It prefers to take a majority or a minority stake. While investing in Japan, it does not invest in companies with more than 1,000 employees and prefers companies' worth between $100 million and $150 million. The firm originates, structures, and acts as lead equity investor in the transactions. The Carlyle Group Inc. was founded in 1987 and is based in Washington, District of Columbia with additional offices in 21 countries across 5 continents (North America, South America, Asia, Australia and Europe).

About U.S. Global Investors

U.S. Global Investors, Inc. is a publicly owned investment manager. It primarily provides its services to investment companies. The firm is a large advisory firm, an investment adviser to an investment company which provides portfolio management for investment companies. The firm manages and launches equity/balanced funds, fixed income funds and other funds. It also manages hedge funds. The firm primarily invests in no-load mutual funds and exchange traded funds (ETFs). U.S. Global Investors, Inc. is based in San Antonio, Texas.