Head-To-Head Analysis: Heritage Global (NASDAQ:HGBL) vs. Moody’s (NYSE:MCO)

Moody’s (NYSE:MCO) and Heritage Global (NASDAQ:HGBL) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, valuation, earnings, dividends, institutional ownership, risk and analyst recommendations.

Insider & Institutional Ownership

92.1% of Moody’s shares are owned by institutional investors. Comparatively, 33.5% of Heritage Global shares are owned by institutional investors. 0.1% of Moody’s shares are owned by insiders. Comparatively, 14.0% of Heritage Global shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Moody’s and Heritage Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moody’s	29.92%	63.58%	16.34%
Heritage Global	6.18%	4.69%	3.60%

Valuation & Earnings

This table compares Moody’s and Heritage Global”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moody’s	$7.09 billion	13.39	$2.06 billion	$12.44	42.76
Heritage Global	$45.36 million	0.97	$5.18 million	$0.09	14.00

Moody’s has higher revenue and earnings than Heritage Global. Heritage Global is trading at a lower price-to-earnings ratio than Moody’s, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Moody’s has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, Heritage Global has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Moody’s and Heritage Global, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moody’s	0	5	13	1	2.79
Heritage Global	1	1	1	1	2.50

Moody’s currently has a consensus target price of $550.27, suggesting a potential upside of 3.44%. Heritage Global has a consensus target price of $4.00, suggesting a potential upside of 217.46%. Given Heritage Global’s higher possible upside, analysts clearly believe Heritage Global is more favorable than Moody’s.

Summary

Moody’s beats Heritage Global on 12 of the 14 factors compared between the two stocks.

About Moody’s

Moody’s Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody’s Analytics and Moody’s Investors Services. The Moody’s Analytics segment develops a range of products and services that support the risk management activities of institutional participants in financial markets. It also offers credit research, credit models and analytics, economics data and models, and structured finance solutions; data sets on companies and securities; and SaaS solutions supporting banking, insurance, and know your customer workflows. The Moody’s Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, as well as structured finance securities. The company was formerly known as Dun and Bradstreet Company and changed its name to Moody’s Corporation in September 2000. Moody’s Corporation was founded in 1900 and is headquartered in New York, New York.

About Heritage Global

Heritage Global Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company operates in three segments: Auction and Liquidation, Refurbishment & Resale, and Brokerage. It provides a suite of market making, acquisitions, refurbishment, dispositions, valuations, and secured lending services. The company focuses on identifying, valuing, acquiring, and monetizing underlying tangible assets. It acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; and charged-off receivable portfolios. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was founded in 1937 and is headquartered in San Diego, California.