Critical Survey: Westwood Holdings Group (NYSE:WHG) versus BlackRock (NYSE:BLK)

Westwood Holdings Group (NYSE:WHG) and BlackRock (NYSE:BLK) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Dividends

Westwood Holdings Group pays an annual dividend of $0.60 per share and has a dividend yield of 3.4%. BlackRock pays an annual dividend of $20.84 per share and has a dividend yield of 1.9%. Westwood Holdings Group pays out 73.2% of its earnings in the form of a dividend. BlackRock pays out 53.6% 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. BlackRock has increased its dividend for 16 consecutive years.

Profitability

This table compares Westwood Holdings Group and BlackRock’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westwood Holdings Group	7.58%	8.74%	7.35%
BlackRock	26.64%	14.80%	5.04%

Earnings & Valuation

This table compares Westwood Holdings Group and BlackRock”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westwood Holdings Group	$94.72 million	1.75	$2.21 million	$0.82	21.46
BlackRock	$20.41 billion	8.28	$6.37 billion	$38.89	28.00

BlackRock has higher revenue and earnings than Westwood Holdings Group. Westwood Holdings Group is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Westwood Holdings Group and BlackRock, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westwood Holdings Group	0	0	1	0	3.00
BlackRock	0	3	17	0	2.85

BlackRock has a consensus target price of $1,316.18, indicating a potential upside of 20.87%. Given BlackRock’s higher possible upside, analysts plainly believe BlackRock is more favorable than Westwood Holdings Group.

Institutional & Insider Ownership

56.6% of Westwood Holdings Group shares are owned by institutional investors. Comparatively, 80.7% of BlackRock shares are owned by institutional investors. 8.2% of Westwood Holdings Group shares are owned by insiders. Comparatively, 2.0% of BlackRock shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Westwood Holdings Group has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, BlackRock has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.

Summary

BlackRock beats Westwood Holdings Group on 13 of the 17 factors compared between the two stocks.

About Westwood Holdings Group

Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.

About BlackRock

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.