Head-To-Head Contrast: Moelis & Company (NYSE:MC) vs. Charles Schwab (NYSE:SCHW)

Charles Schwab (NYSE:SCHW) and Moelis & Company (NYSE:MC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Analyst Recommendations

This is a summary of current ratings for Charles Schwab and Moelis & Company, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Charles Schwab	2	3	16	0	2.67
Moelis & Company	1	4	2	1	2.38

Charles Schwab presently has a consensus target price of $99.60, suggesting a potential upside of 2.76%. Moelis & Company has a consensus target price of $66.00, suggesting a potential downside of 8.96%. Given Charles Schwab’s stronger consensus rating and higher possible upside, equities analysts clearly believe Charles Schwab is more favorable than Moelis & Company.

Insider and Institutional Ownership

84.4% of Charles Schwab shares are owned by institutional investors. Comparatively, 91.5% of Moelis & Company shares are owned by institutional investors. 6.3% of Charles Schwab shares are owned by insiders. Comparatively, 6.4% of Moelis & Company shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Charles Schwab and Moelis & Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Charles Schwab	33.68%	19.30%	1.66%
Moelis & Company	14.31%	42.72%	17.12%

Volatility and Risk

Charles Schwab has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Moelis & Company has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Dividends

Charles Schwab pays an annual dividend of $1.08 per share and has a dividend yield of 1.1%. Moelis & Company pays an annual dividend of $2.60 per share and has a dividend yield of 3.6%. Charles Schwab pays out 29.0% of its earnings in the form of a dividend. Moelis & Company pays out 102.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Charles Schwab has increased its dividend for 1 consecutive years and Moelis & Company has increased its dividend for 1 consecutive years.

Earnings and Valuation

This table compares Charles Schwab and Moelis & Company”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Charles Schwab	$19.61 billion	8.97	$5.94 billion	$3.72	26.05
Moelis & Company	$1.19 billion	4.76	$136.02 million	$2.54	28.54

Charles Schwab has higher revenue and earnings than Moelis & Company. Charles Schwab is trading at a lower price-to-earnings ratio than Moelis & Company, indicating that it is currently the more affordable of the two stocks.

Summary

Charles Schwab beats Moelis & Company on 9 of the 17 factors compared between the two stocks.

About Charles Schwab

The Charles Schwab Corporation, together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services in the United States and internationally. The company operates in two segments, Investor Services and Advisor Services. It offers brokerage accounts with equity and fixed income trading, margin lending, options trading, futures and forex trading, and cash management capabilities, including certificates of deposit; third-party mutual funds through the Mutual Fund Marketplace and Mutual Fund OneSource service, as well as mutual fund trading and clearing services to broker-dealers; exchange-traded funds; advisory solutions for managed portfolios, separately managed accounts, customized personal advice for tailored portfolios, specialized planning, and full-time portfolio management; banking products comprising checking and savings accounts, first lien residential real estate mortgage loans, home equity lines of credit, and pledged asset lines; and trust custody services, personal trust reporting services, and administrative trustee services. It also provides digital retirement calculators; integrated web-, mobile-, and software-based trading platforms, real-time market data, options trading, premium research, and multi-channel access; self-service education and support tools; online research and analysis tools; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; retirement plan services; mutual fund clearing services; and advisor services, including interactive tools and educational content. The Company operates through branch offices. The Charles Schwab Corporation was incorporated in 1971 and is headquartered in Westlake, Texas.

About Moelis & Company

Moelis & Co. operates as a holding company. It engages in the provision of financial advisory, capital raising and asset management services to a client base including corporations, governments, sovereign wealth funds and financial sponsors. The firm focuses on clients including large public multinational corporations, middle market private companies, financial sponsors, entrepreneurs and governments. The company was founded by Kenneth David Moelis, Navid Mahmoodzadegan, Jeffrey Raich and Elizabeth Ann Crain in July 2007 and is headquartered in New York, NY.