Affiliated Managers Group, Inc. (NYSE: AMG)

Sector: Financial Services Industry: Asset Management CIK: 0001004434
Market Cap 9.19 Bn
P/B 2.84
P/E 12.83
P/S 4.43
ROIC (Qtr) 4.89
Div Yield % 0.01
Rev 1y % (Qtr) 6.16
Total Debt (Qtr) 2.69 Bn
Debt/Equity (Qtr) 0.83
Add ratio to table...

About

Affiliated Managers Group, Inc. (AMG), a company listed on the NASDAQ stock exchange under the symbol AMG, operates in the investment management industry. AMG's primary business activities involve generating long-term value by investing in a diverse array of high-quality independent partner-owned firms, referred to as "Affiliates." The company operates in various countries, with a presence in over 50 nations. AMG's main offerings include a range of investment management strategies, which are divided into three segments - Private Markets, Liquid...

Read more

Investment thesis

Bull case

  • Robust free cash flow of 967.10M exceeds capital expenditure of 6.10M by 158.54x, indicating strong organic growth funding capability.
  • Operating cash flow of 973.20M provides strong 4.05x coverage of operating expenses 240.50M, showing operational efficiency.
  • Free cash flow of 967.10M provides solid 4.02x coverage of operating expenses 240.50M, showing operational efficiency.
  • Operating cash flow of 973.20M provides strong 159.54x coverage of capital expenditure 6.10M, enabling organic growth.
  • Retained earnings of 7.62B represent substantial 2.35x of equity 3.24B, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 973.20M barely covers its investment activities of (206.10M), with a coverage ratio of -4.72, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 973.20M provides thin coverage of dividend payments of (1M) with a -973.20 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 586M provide limited coverage of acquisition spending of (362.40M), which is -1.62x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 973.20M shows concerning coverage of stock compensation expenses of 202.80M, with a 4.80 ratio indicating potential earnings quality issues.
  • Operating cash flow of 973.20M is outpaced by equity issuance of (706.30M) (-1.38 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Asset Management
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BLK BlackRock, Inc. 199.59 Bn 85.40 21.98 15.04 Bn
2 BN BROOKFIELD Corp /ON/ 103.94 Bn 31.52 5.64 262.97 Bn
3 AMP Ameriprise Financial Inc 88.69 Bn 55.02 7.20 5.89 Bn
4 BX Blackstone Inc. 88.51 Bn 49.39 10.93 12.89 Bn
5 KKR KKR & Co. Inc. 55.86 Bn 28.33 13.23 53.12 Bn
6 STT State Street Corp 46.52 Bn 21.77 3.91 34.72 Bn
7 NTRS Northern Trust Corp 34.14 Bn 33.31 6.71 15.64 Bn
8 RJF Raymond James Financial Inc 32.89 Bn 37.63 4.14 5.10 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.20 0.94
EV to Cash from Ops. EV/CFO 11.39 41.10
EV to Debt EV to Debt 4.12 15.28
EV to EBIT EV/EBIT 9.77 23.47
EV to EBITDA EV/EBITDA 26.66 47.80
EV to Free Cash Flow [EV/FCF] EV/FCF 11.47 38.62
EV to Market Cap EV to Market Cap 1.21 7.81
EV to Revenue EV/Rev 5.35 27.38
Price to Book Value [P/B] P/B 2.84 2.34
Price to Earnings [P/E] P/E 12.83 11.81
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 716.60 4.66
Dividend Payout Ratio % Div Payout % (Qtr) 0.20 -5.56
Dividend per Basic Share Div per Share (Qtr) 0.04 1.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.12 49.83
Interest Coverage Int. cover (Qtr) 8.32 25.16
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -79.41 -35.10
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -38.32 15.43
Dividend Growth (1y) % Div 1y % (Qtr) 33.33 1.65
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 33.56 -90.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -38.82 35.24
EBIT Growth (1y) % EBIT 1y % (Qtr) 37.21 -22.13
EBT Growth (1y) % EBT 1y % (Qtr) 43.89 -163.05
EPS Growth (1y) % EPS 1y % (Qtr) 53.07 -20.61
FCF Growth (1y) % FCF 1y % (Qtr) 4.13 220.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.64 -53.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.23 0.22
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.36
Cash Ratio Cash Ratio (Qtr) 0.00 0.38
Current Ratio Curr Ratio (Qtr) 0.00 0.86
Debt to Equity Ratio Debt/Equity (Qtr) 0.83 0.70
Interest Cover Ratio Int Coverage (Qtr) 8.32 25.16
Times Interest Earned Times Interest Earned (Qtr) 8.32 25.16
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 55.20 -114.76
EBIT Margin % EBIT Margin % (Qtr) 54.73 -127.24
EBT Margin % EBT Margin % (Qtr) 48.15 -150.97
Gross Margin % Gross Margin % (Qtr) 100.00 67.88
Net Profit Margin % Net Margin % (Qtr) 34.50 -148.68