Morningstar (NASDAQ:MORN) & FactSet Research Systems (NYSE:FDS) Head to Head Comparison

Morningstar (NASDAQ:MORN) and FactSet Research Systems (NYSE:FDS) are both large-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Dividends

Morningstar pays an annual dividend of $1.82 per share and has a dividend yield of 0.6%. FactSet Research Systems pays an annual dividend of $4.40 per share and has a dividend yield of 1.0%. Morningstar pays out 20.4% of its earnings in the form of a dividend. FactSet Research Systems pays out 31.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Morningstar has raised its dividend for 16 consecutive years and FactSet Research Systems has raised its dividend for 27 consecutive years. FactSet Research Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Morningstar has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, FactSet Research Systems has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Insider & Institutional Ownership

57.0% of Morningstar shares are held by institutional investors. Comparatively, 91.2% of FactSet Research Systems shares are held by institutional investors. 36.2% of Morningstar shares are held by insiders. Comparatively, 1.1% of FactSet Research Systems shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Morningstar and FactSet Research Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Morningstar	$2.28 billion	5.81	$369.90 million	$8.90	35.17
FactSet Research Systems	$2.20 billion	7.61	$537.13 million	$14.06	31.44

FactSet Research Systems has lower revenue, but higher earnings than Morningstar. FactSet Research Systems is trading at a lower price-to-earnings ratio than Morningstar, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Morningstar and FactSet Research Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Morningstar	16.60%	23.23%	10.26%
FactSet Research Systems	23.30%	31.59%	15.37%

Analyst Recommendations

This is a breakdown of current recommendations for Morningstar and FactSet Research Systems, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morningstar	0	1	2	0	2.67
FactSet Research Systems	3	6	0	0	1.67

Morningstar presently has a consensus price target of $361.67, suggesting a potential upside of 15.54%. FactSet Research Systems has a consensus price target of $444.25, suggesting a potential upside of 0.51%. Given Morningstar’s stronger consensus rating and higher possible upside, analysts clearly believe Morningstar is more favorable than FactSet Research Systems.

Summary

FactSet Research Systems beats Morningstar on 9 of the 17 factors compared between the two stocks.

About Morningstar

Morningstar, Inc. provides independent investment insights in the United States, Asia. Australia, Continental Europe, the United Kingdom, and internationally. The company operates in five segments: Morningstar Data and Analytics; PitchBook; Morningstar Wealth; Morningstar Credit; and Morningstar Retirement. The company offers managing investments, including mutual funds, ETFs, separate accounts, collective investment trusts, model portfolios, equities, and fixed income securities; Morningstar Direct is an investment-analysis and reporting platform; Morningstar Advisor Workstation, a suite of tool to provide help and advice. The PitchBook segment provides data and research covering the private capital markets comprising venture capital, private equity, private credit and bank loans, and merger and acquisition activities; and pitchbook platform. It provides model portfolios and wealth platforms; Morningstar Managed Portfolios, an advisor service with model portfolios designed for fee-based independent financial advisors; and Morningstar.com that discovers, evaluates, and monitors stocks, ETFs, and mutual funds; build and monitor portfolios and markets. In addition, the company provides credit ratings, research, data, and credit analytics solutions; Morningstar DBRS which offers securitizations and other structured finance instruments, such as asset-backed securities, residential mortgage-backed securities, commercial mortgage-backed securities, and collateralized loan obligations. Further, it offers managed retirement accounts, fiduciary services, Morningstar Lifetime Allocation funds, and custom models; Morningstar Indexes offers market indexes used for performance benchmarks and as the basis for investment products and other portfolio strategies; and Morningstar Sustainalytics provides environmental, social and governance data, research, analysis, and insights. Morningstar, Inc. was incorporated in 1984 and is headquartered in Chicago, Illinois.

About FactSet Research Systems

FactSet Research Systems Inc., a financial data company, provides integrated financial information and analytical applications to the investment community in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company delivers insight and information through the workflow solutions of research, analytics and trading, content and technology solutions, and wealth. It serves portfolio managers, investment banks, asset managers, wealth advisors, corporate clients, and other financial services entities. FactSet Research Systems Inc. was founded in 1978 and is headquartered in Norwalk, Connecticut.