Critical Survey: MSCI (NYSE:MSCI) & Victory Capital (NASDAQ:VCTR)

MSCI (NYSE:MSCI) and Victory Capital (NASDAQ:VCTR) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of current recommendations for MSCI and Victory Capital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSCI	0	3	11	1	2.87
Victory Capital	0	4	6	0	2.60

MSCI presently has a consensus target price of $652.45, indicating a potential upside of 16.31%. Victory Capital has a consensus target price of $73.78, indicating a potential upside of 12.84%. Given MSCI’s stronger consensus rating and higher probable upside, analysts plainly believe MSCI is more favorable than Victory Capital.

Volatility and Risk

MSCI has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500. Comparatively, Victory Capital has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Earnings and Valuation

This table compares MSCI and Victory Capital”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSCI	$2.86 billion	15.19	$1.11 billion	$15.10	37.15
Victory Capital	$893.48 million	4.89	$288.86 million	$4.05	16.14

MSCI has higher revenue and earnings than Victory Capital. Victory Capital is trading at a lower price-to-earnings ratio than MSCI, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

90.0% of MSCI shares are owned by institutional investors. Comparatively, 87.7% of Victory Capital shares are owned by institutional investors. 3.3% of MSCI shares are owned by company insiders. Comparatively, 9.4% of Victory Capital shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares MSCI and Victory Capital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSCI	39.46%	-143.13%	23.46%
Victory Capital	27.18%	26.46%	13.03%

Dividends

MSCI pays an annual dividend of $7.20 per share and has a dividend yield of 1.3%. Victory Capital pays an annual dividend of $1.96 per share and has a dividend yield of 3.0%. MSCI pays out 47.7% of its earnings in the form of a dividend. Victory Capital pays out 48.4% 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. MSCI has increased its dividend for 11 consecutive years and Victory Capital has increased its dividend for 6 consecutive years.

Summary

MSCI beats Victory Capital on 15 of the 18 factors compared between the two stocks.

About MSCI

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.

About Victory Capital

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an asset management company in the United States and internationally. It offers investment advisory, fund administration, fund compliance, fund transfer agent, fund distribution, and other management services. The company provides specialized investment strategies to institutions, intermediaries, retirement platforms, and individual investors. Its investment products include actively and passively managed mutual funds; rules-based and active exchange traded funds; institutional separate accounts; variable insurance products; alternative investments; and private closed-end funds; and a 529 Education Savings Plan. The company also offers strategies through third-party investment products, including mutual funds, third-party ETF model strategies, retail separately managed accounts, unified managed accounts through wrap account programs, Collective Investment Trusts, and undertakings for the collective investment in transferable securities. Victory Capital Holdings, Inc. was incorporated in 2013 and is based in San Antonio, Texas.