Moelis & Company (NYSE:MC) and Morgan Stanley (NYSE:MS) Financial Contrast

Moelis & Company (NYSE:MC) and Morgan Stanley (NYSE:MS) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Dividends

Moelis & Company pays an annual dividend of $2.60 per share and has a dividend yield of 3.6%. Morgan Stanley pays an annual dividend of $4.00 per share and has a dividend yield of 2.6%. 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. Morgan Stanley pays out 45.3% of its earnings in the form of a dividend. Moelis & Company has raised its dividend for 1 consecutive years and Morgan Stanley has raised its dividend for 12 consecutive years.

Risk and Volatility

Moelis & Company has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500. Comparatively, Morgan Stanley has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Moelis & Company and Morgan Stanley, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moelis & Company	1	4	2	1	2.38
Morgan Stanley	0	9	5	1	2.47

Moelis & Company presently has a consensus price target of $69.67, indicating a potential downside of 3.46%. Morgan Stanley has a consensus price target of $138.25, indicating a potential downside of 9.18%. Given Moelis & Company’s higher possible upside, equities research analysts clearly believe Moelis & Company is more favorable than Morgan Stanley.

Valuation and Earnings

This table compares Moelis & Company and Morgan Stanley”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moelis & Company	$1.19 billion	4.74	$136.02 million	$2.54	28.41
Morgan Stanley	$107.29 billion	2.26	$13.39 billion	$8.83	17.24

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

Institutional & Insider Ownership

91.5% of Moelis & Company shares are held by institutional investors. Comparatively, 84.2% of Morgan Stanley shares are held by institutional investors. 6.4% of Moelis & Company shares are held by insiders. Comparatively, 0.2% of Morgan Stanley shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Moelis & Company	14.31%	42.72%	17.12%
Morgan Stanley	13.06%	15.20%	1.15%

Summary

Moelis & Company beats Morgan Stanley on 10 of the 17 factors compared between the two stocks.

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.

About Morgan Stanley

Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. It operates through Institutional Securities, Wealth Management, and Investment Management segments. The Institutional Securities segment offers capital raising and financial advisory services, including services related to the underwriting of debt, equity, and other securities, as well as advice on mergers and acquisitions, restructurings, real estate, and project finance. This segment also provides equity and fixed income products comprising sales, financing, prime brokerage, and market-making services; foreign exchange and commodities; corporate and commercial real estate loans, commercial mortgage and secured lending facilities, and financing for sales and trading customers, and asset-backed and mortgage lending; and wealth management services, investment, and research services. The Wealth Management segment offers financial advisor-led brokerage, custody, administrative, and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; annuity and insurance products; securities-based lending, residential real estate loans, and other lending products; banking; and retirement plan services to individual investors and small to medium-sized businesses and institutions. The Investment Management segment provides equity, fixed income, alternatives and solutions, and liquidity and overlay services to benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors, corporations, and individuals through institutional and intermediary channels. The company was founded in 1924 and is headquartered in New York, New York.