StepStone Group (NASDAQ:STEP) versus 3i Group (OTCMKTS:TGOPY) Head-To-Head Analysis

3i Group (OTCMKTS:TGOPY) and StepStone Group (NASDAQ:STEP) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Profitability

This table compares 3i Group and StepStone Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
3i Group	N/A	N/A	N/A
StepStone Group	-40.06%	21.53%	5.22%

Earnings & Valuation

This table compares 3i Group and StepStone Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
3i Group	$6.37 billion	6.60	N/A	N/A	N/A
StepStone Group	$1.17 billion	7.26	-$179.56 million	($8.00)	-9.02

3i Group has higher revenue and earnings than StepStone Group.

Analyst Recommendations

This is a summary of current ratings for 3i Group and StepStone Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
3i Group	1	0	3	0	2.50
StepStone Group	1	3	4	1	2.56

StepStone Group has a consensus target price of $74.57, suggesting a potential upside of 3.40%. Given StepStone Group’s stronger consensus rating and higher probable upside, analysts clearly believe StepStone Group is more favorable than 3i Group.

Insider & Institutional Ownership

55.5% of StepStone Group shares are held by institutional investors. 16.5% of StepStone Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

3i Group pays an annual dividend of $0.19 per share and has a dividend yield of 1.8%. StepStone Group pays an annual dividend of $1.12 per share and has a dividend yield of 1.6%. StepStone Group pays out -14.0% of its earnings in the form of a dividend. StepStone Group has raised its dividend for 3 consecutive years.

Summary

StepStone Group beats 3i Group on 11 of the 14 factors compared between the two stocks.

About 3i Group

3i Group plc is a private equity firm specializing in mature companies, growth capital, middle markets, infrastructure, and management leveraged buyouts and buy-ins. The firm also provides infrastructure financing and debt management. For debt management, it invests in senior and mezzanine corporate debt in typically large and private companies in United Kingdom, Europe, Asia, and North America. It makes private equity investments in business and technology services, financial services, consumer, healthcare, consumption and distribution, media and telecom, renewable energy, wind, and industrial technology sector. Within business and technology services, the firm seeks to invest in sub sectors such as testing, inspection and certification; intelligent outsourcing, BPO and consultancy; human capital including staffing, governance, risk and compliance, services to pharmaceutical companies, vertical application software, education and training businesses; facilities management; support services to industrial sectors such as oil and gas and utilities; human resources outsourcing and advising; recruitment; logistics and infrastructure support services including distribution, waste, and rental. In the consumer sector, it focuses on, multi-unit roll out, omni-channel propositions, niche branded consumer goods, polarization, health and wellness, ageing population, millennials, consumer goods; e-commerce; retail; food and drinks; and leisure. In the healthcare sector, the firm focuses on outsourced medical device manufacturing & services, outsourced pharmaceutical manufacturing & services, bioprocessing supply chain, life science tools and diagnostics, wellness & consumer health products, pharmaceuticals and biotechnology including specialty pharma, generics / OTC, drug delivery, and animal health; healthcare Services including activities such as elderly and specialty care, including caring for people in their own homes, in hospital and in community facilities, as well as operational services such as outsourced support, clinical services and B2B contract services; medical devices and technology including devices, medical equipment and consumables, diagnostics, and healthcare IT. In the industrial sector, it focuses on automotive, chemicals, safety and security, construction, building products and materials, energy, electronics and electrical components, flow control and filtration, mobility, packaging, industrial Services incl. industrial software, oil, gas, and power. Through 3i BIFM Limited and 3i Infrastructure plc the firm makes infrastructure investments where it focuses principally on the utilities including energy transmission and storage, electricity and gas distribution, water, power generation, and communication network; transportation including airports, ports, ferries, toll roads, and rail; and social infrastructure sector including primary and secondary PFI, public private partnerships, healthcare, education, and government accommodation. In infrastructure it invests primarily in utilities, transportation and social infrastructure in the United Kingdom, France, Italy, Europe, and Ireland. The firm prefers to invest in companies across Europe, France, United States, South America, and Asia. It seeks to make new investments in Northern Europe and North America. The firm typically invests between 5 million ($5.59125 million) and 300 million ($335.475 million) in companies with an enterprise value typically between 100 million ($111.825 million) and 500 million ($559.125 million) and sales value between 80 million ($89.46 million) and 1500 million ($1677.38 million). It seeks to take either majority or minority stakes. It seeks to take a board seat in its portfolio companies with regards to infrastructure investments. The firm invests through a combination of third-party and proprietary capital. It invests through its personal capital. 3i Group plc was founded in 1945 and is based in London, United Kingdom with additional offices across Europe, North America, and Asia.

About StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.