What’s behind Carlyle’s Higher Valuation
Whereas The Carlyle Group (CG) has an NTM (next-12-month) price-to-book ratio of 4.9x, peers’ average ratio is 3.2x, indicating that Carlyle has a premium valuation. Competitors (XLF) Ameriprise Financial (AMP), Brookfield Asset Management (BAM), and CBRE Group (CBG) have NTM price-to-book ratios of 4.1x, 1.7x, and 3.7x, respectively.
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A possible reason for Carlyle’s higher valuation could be its one-year price target being higher than its current market price. Wall Street analysts have given Carlyle a one-year target of $27.50, which implies an 8.7% rise from its current price of $25.30.
Further rise in valuation
Carlyle could see its valuation rise further due to its quarterly dividend payout, which has been increasing. The company declared a quarterly dividend of $0.10 per share in May 2017, $0.42 per share in August 2017, and $0.56 per share in October 2017.
Carlyle’s rising EPS (earnings per share) estimates for 4Q17 could also boost the company’s valuation. A few days ago, analysts had projected 4Q17 EPS of $0.53, while their current estimate is $0.55.