Head to Head Analysis: Morgan Stanley Direct Lending Fund (NYSE:MSDL) vs. Affiliated Managers Group (NYSE:AMG)

Affiliated Managers Group (NYSE:AMG) and Morgan Stanley Direct Lending Fund (NYSE:MSDL) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, analyst recommendations, institutional ownership, earnings, dividends and risk.

Analyst Recommendations

This is a breakdown of current recommendations for Affiliated Managers Group and Morgan Stanley Direct Lending Fund, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Affiliated Managers Group	0	0	7	1	3.12
Morgan Stanley Direct Lending Fund	0	6	1	0	2.14

Affiliated Managers Group presently has a consensus price target of $370.86, suggesting a potential upside of 4.15%. Morgan Stanley Direct Lending Fund has a consensus price target of $15.50, suggesting a potential upside of 5.98%. Given Morgan Stanley Direct Lending Fund’s higher probable upside, analysts plainly believe Morgan Stanley Direct Lending Fund is more favorable than Affiliated Managers Group.

Dividends

Affiliated Managers Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Morgan Stanley Direct Lending Fund pays an annual dividend of $1.80 per share and has a dividend yield of 12.3%. Affiliated Managers Group pays out 0.1% of its earnings in the form of a dividend. Morgan Stanley Direct Lending Fund pays out 260.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

95.3% of Affiliated Managers Group shares are owned by institutional investors. 2.9% of Affiliated Managers Group shares are owned by insiders. Comparatively, 0.3% of Morgan Stanley Direct Lending Fund shares are owned by 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.

Volatility & Risk

Affiliated Managers Group has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, Morgan Stanley Direct Lending Fund has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Valuation and Earnings

This table compares Affiliated Managers Group and Morgan Stanley Direct Lending Fund”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Affiliated Managers Group	$2.07 billion	4.44	$716.60 million	$28.87	12.33
Morgan Stanley Direct Lending Fund	$397.29 million	3.10	$122.09 million	$0.69	21.20

Affiliated Managers Group has higher revenue and earnings than Morgan Stanley Direct Lending Fund. Affiliated Managers Group is trading at a lower price-to-earnings ratio than Morgan Stanley Direct Lending Fund, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Affiliated Managers Group and Morgan Stanley Direct Lending Fund’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Affiliated Managers Group	37.72%	21.94%	9.72%
Morgan Stanley Direct Lending Fund	15.97%	9.61%	4.28%

Summary

Affiliated Managers Group beats Morgan Stanley Direct Lending Fund on 14 of the 17 factors compared between the two stocks.

About Affiliated Managers Group

Affiliated Managers Group, Inc., through its affiliates, operates as an investment management company providing investment management services to mutual funds, institutional clients,retails and high net worth individuals in the United States. It provides advisory or sub-advisory services to mutual funds. These funds are distributed to retail, high net worth and institutional clients directly and through intermediaries, including independent investment advisors, retirement plan sponsors, broker-dealers, major fund marketplaces, and bank trust departments. The company also offers investment products in various investment styles in the institutional distribution channel, including small, small/mid, mid, and large capitalization value and growth equity, and emerging markets. In addition, it offers quantitative, alternative, and fixed income products, and manages assets for foundations and endowments, defined benefit, and defined contribution plans for corporations and municipalities. Affiliated Managers Group provides investment management or customized investment counseling and fiduciary services. Affiliated Managers Group, Inc. was formed in 1993 and is based in West Palm Beach, Florida with additional offices in Prides Crossing, Massachusetts; Stamford, Connecticut; London, United Kingdom; Dubai, United Arab Emirates; Sydney, Australia; Hong Kong; Tokyo, Japan, Zurich, Switzerland and Delaware.

About Morgan Stanley Direct Lending Fund

Morgan Stanley Direct Lending Fund is a business development company. It is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. Morgan Stanley Direct Lending Fund is based in NEW YORK.