Hamilton Lane (NASDAQ:HLNE) and MSCI (NYSE:MSCI) Critical Comparison

Hamilton Lane (NASDAQ:HLNE) and MSCI (NYSE:MSCI) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Dividends

Hamilton Lane pays an annual dividend of $2.16 per share and has a dividend yield of 2.0%. MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.4%. Hamilton Lane pays out 38.8% of its earnings in the form of a dividend. MSCI pays out 52.3% 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. Hamilton Lane has increased its dividend for 8 consecutive years and MSCI has increased its dividend for 11 consecutive years. Hamilton Lane is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Hamilton Lane has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, MSCI has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Valuation and Earnings

This table compares Hamilton Lane and MSCI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hamilton Lane	$712.96 million	8.35	$217.42 million	$5.57	19.17
MSCI	$3.13 billion	13.31	$1.20 billion	$15.69	36.20

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

Profitability

This table compares Hamilton Lane and MSCI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hamilton Lane	30.59%	27.82%	16.02%
MSCI	38.36%	-82.59%	24.29%

Institutional & Insider Ownership

97.4% of Hamilton Lane shares are held by institutional investors. Comparatively, 90.0% of MSCI shares are held by institutional investors. 22.2% of Hamilton Lane shares are held by company insiders. Comparatively, 3.8% of MSCI shares are held by company 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.

Analyst Recommendations

This is a summary of current ratings and price targets for Hamilton Lane and MSCI, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hamilton Lane	0	4	6	0	2.60
MSCI	0	3	7	1	2.82

Hamilton Lane currently has a consensus price target of $157.63, indicating a potential upside of 47.62%. MSCI has a consensus price target of $665.89, indicating a potential upside of 17.25%. Given Hamilton Lane’s higher probable upside, research analysts plainly believe Hamilton Lane is more favorable than MSCI.

Summary

MSCI beats Hamilton Lane on 11 of the 18 factors compared between the two stocks.

About Hamilton Lane

Hamilton Lane Incorporated is a private equity firm specializing in early venture, emerging growth, turnaround, middle market, mature, mid-venture, bridge, buyout, distressed/vulture, loan, mezzanine in growth capital companies. It prefers to invest in energy, industrials, consumer discretionary, health care, real estate, information technology, utilities, and consumer services. The firm prefers to invest in Africa/Middle East, Asia/Pacific, Europe, Latin America and Caribbean, United States of America, and Canada. The firm prefers to invest between $1 million and $100 million. It prefers to take majority stake. Hamilton Lane Incorporated was founded in 1991 and is based in Conshohocken, Pennsylvania with additional offices across Europe, North America, Asia Pacific and the Middle East.

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.