Artisan Partners Asset Management Inc. (NYSE: APAM)

Sector: Financial Services Industry: Asset Management CIK: 0001517302
Market Cap 2.21 Bn
P/B 14.14
P/E 22.91
P/S 2.88
ROIC (Qtr) 34.87
Div Yield % 10.24
Rev 1y % (Qtr) 7.76
Total Debt (Qtr) 314.04 Mn
Debt/Equity (Qtr) 0.78
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About

Artisan Partners Asset Management Inc., often referred to as Artisan Partners, is a prominent player in the global investment management industry. Established in 1994, the company has grown into a leading investment manager, providing high-value, active investment strategies to a diverse range of clients worldwide. Artisan Partners' main business activities revolve around the management of various investment strategies, including growth, value, and fixed income, spread across different asset classes and geographic regions. The company's investment...

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Investment thesis

Bull case

  • Strong operating cash flow of 286.41M provides robust 0.91x coverage of total debt 314.04M, indicating excellent debt servicing capability and financial flexibility.
  • Robust free cash flow of 285.59M exceeds capital expenditure of 816000 by 349.99x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 1.58B provides 5.04x coverage of total debt 314.04M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 286.41M provides exceptional 33.28x coverage of interest expenses 8.61M, showing strong debt service capability.
  • Free cash flow of 285.59M provides exceptional 33.18x coverage of interest expense 8.61M, showing strong debt service ability.

Bear case

  • Operating cash flow of 286.41M provides thin coverage of dividend payments of (305.06M) with a -0.94 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 285.59M represents just -27.60x of debt issuance (10.35M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 170.98M provide limited buffer against comprehensive income items of (1.71M), which is -100.10x, indicating elevated exposure to market risks.
  • Operating cash flow of 286.41M shows concerning coverage of minority interest expenses of 82.08M, which is 3.49x, suggesting complex corporate structure risks.
  • R&D investment of 0 represents just 0x of SG&A expenses of 780.95M, indicating potential underinvestment in innovation relative to administrative overhead.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

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 1.39 0.94
EV to Cash from Ops. EV/CFO 7.80 41.10
EV to Debt EV to Debt 6.98 15.28
EV to EBIT EV/EBIT 12.94 23.47
EV to EBITDA EV/EBITDA 8.14 47.80
EV to Free Cash Flow [EV/FCF] EV/FCF 7.94 38.62
EV to Market Cap EV to Market Cap 0.99 7.81
EV to Revenue EV/Rev 2.86 27.38
Price to Book Value [P/B] P/B 14.14 2.34
Price to Earnings [P/E] P/E 22.91 11.81
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.87 4.66
Dividend Payout Ratio % Div Payout % (Qtr) 97.30 -5.56
Dividend per Basic Share Div per Share (Qtr) 3.57 1.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 82.09 49.83
Interest Coverage Int. cover (Qtr) 44.30 25.16
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 87.74 -35.10
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 22.30 15.43
Dividend Growth (1y) % Div 1y % (Qtr) 19.40 1.65
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 3.90 -90.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 12.33 35.24
EBIT Growth (1y) % EBIT 1y % (Qtr) 9.30 -22.13
EBT Growth (1y) % EBT 1y % (Qtr) 9.50 -163.05
EPS Growth (1y) % EPS 1y % (Qtr) 2.23 -20.61
FCF Growth (1y) % FCF 1y % (Qtr) -10.54 220.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.88 -53.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.73 0.22
Cash Payout Ratio Cash Payout (Qtr) 1.06 0.36
Cash Ratio Cash Ratio 0.00 0.38
Current Ratio Current Ratio 0.00 0.86
Debt to Equity Ratio Debt/Equity (Qtr) 0.78 0.70
Interest Cover Ratio Int Coverage (Qtr) 44.30 25.16
Times Interest Earned Times Interest Earned (Qtr) 44.30 25.16
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 33.70 -114.76
EBIT Margin % EBIT Margin % (Qtr) 32.92 -127.24
EBT Margin % EBT Margin % (Qtr) 32.18 -150.97
Gross Margin % Gross Margin % (Qtr) 100.00 67.88
Net Profit Margin % Net Margin % (Qtr) 22.90 -148.68