Analyzing Victory Capital (NASDAQ:VCTR) and Sprott (NYSE:SII)

Sprott (NYSE:SII) and Victory Capital (NASDAQ:VCTR) are both mid-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitability.

Dividends

Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.6%. Victory Capital pays an annual dividend of $1.96 per share and has a dividend yield of 3.1%. Sprott pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Victory Capital pays out 50.0% of its earnings in the form of a dividend. Sprott has raised its dividend for 1 consecutive years and Victory Capital has raised its dividend for 6 consecutive years. Victory Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Sprott and Victory Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sprott	0	2	3	0	2.60
Victory Capital	0	5	6	0	2.55

Sprott currently has a consensus price target of $132.00, suggesting a potential upside of 34.79%. Victory Capital has a consensus price target of $75.00, suggesting a potential upside of 18.88%. Given Sprott’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Sprott is more favorable than Victory Capital.

Profitability

This table compares Sprott and Victory Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sprott	23.26%	15.01%	11.97%
Victory Capital	25.27%	24.23%	12.71%

Volatility and Risk

Sprott has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, Victory Capital has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Valuation & Earnings

This table compares Sprott and Victory Capital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sprott	$178.65 million	14.14	$49.29 million	$1.95	50.22
Victory Capital	$893.48 million	4.58	$288.86 million	$3.92	16.09

Victory Capital has higher revenue and earnings than Sprott. Victory Capital is trading at a lower price-to-earnings ratio than Sprott, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

28.3% of Sprott shares are held by institutional investors. Comparatively, 87.7% of Victory Capital shares are held by institutional investors. 18.3% of Sprott shares are held by company insiders. Comparatively, 9.4% of Victory Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Victory Capital beats Sprott on 12 of the 17 factors compared between the two stocks.

About Sprott

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.

About Victory Capital

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an asset management company in the United States and internationally. It offers investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution, and other management services. The company provides specialized investment strategies to institutions, intermediaries, retirement platforms, and individual investors. Its investment products include actively and passively managed mutual funds; rules-based and active exchange traded funds; institutional separate accounts; variable insurance products; alternative investments; and private closed-end funds; and a 529 Education Savings Plan. The company also offers strategies through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts, unified managed accounts through wrap account programs, Collective Investment Trusts, and undertakings for the collective investment in transferable securities. Victory Capital Holdings, Inc. was incorporated in 2013 and is based in San Antonio, Texas.