Comparing MSCI (NYSE:MSCI) & GCM Grosvenor (NASDAQ:GCMG)

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

Dividends

MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.3%. GCM Grosvenor pays an annual dividend of $0.48 per share and has a dividend yield of 3.7%. MSCI pays out 46.8% of its earnings in the form of a dividend. GCM Grosvenor pays out 106.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MSCI has increased its dividend for 11 consecutive years.

Institutional and Insider Ownership

90.0% of MSCI shares are owned by institutional investors. Comparatively, 99.9% of GCM Grosvenor shares are owned by institutional investors. 3.8% of MSCI shares are owned by company insiders. Comparatively, 70.7% of GCM Grosvenor shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for MSCI and GCM Grosvenor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSCI	0	0	11	1	3.08
GCM Grosvenor	0	1	3	0	2.75

MSCI currently has a consensus price target of $713.50, indicating a potential upside of 13.46%. GCM Grosvenor has a consensus price target of $15.33, indicating a potential upside of 18.86%. Given GCM Grosvenor’s higher possible upside, analysts clearly believe GCM Grosvenor is more favorable than MSCI.

Profitability

This table compares MSCI and GCM Grosvenor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSCI	40.74%	-65.48%	24.49%
GCM Grosvenor	9.05%	222.78%	18.36%

Valuation & Earnings

This table compares MSCI and GCM Grosvenor”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSCI	$3.24 billion	14.13	$1.20 billion	$17.51	35.91
GCM Grosvenor	$567.19 million	4.60	$45.37 million	$0.45	28.67

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

Volatility and Risk

MSCI has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500. Comparatively, GCM Grosvenor has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Summary

MSCI beats GCM Grosvenor on 13 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 GCM Grosvenor

GCM Grosvenor Inc. is global alternative asset management solutions provider. The firm primarily provides its services to pooled investment vehicles. It also provides its services to investment companies, high net worth individuals, pension and profit sharing plans and state or municipal government entities. The firm invests in equity and alternative investment markets of the United States and internationally. The firm invests in multi-strategy, credit-focused, equity-focused, macro-focused, commodity-focused, and other specialty portfolios. It focuses in hedge fund asset classes, private equity, real estate, and/or infrastructure, credit and absolute return strategies. It also focuses in primary fund investments, secondary fund investments, and co-investments with a focus on buyout, distressed debt, mezzanine, venture capital/growth equity investments. The firm seeks to do seed investments in small, emerging, and diverse private equity firms. The firm seeks to make regionally-focused investments in middle-market buyout. It prefers to invest in aerospace and defense, advanced electronics, information technology, biosciences, and advanced materials. It focuses on Ohio and the Midwest region. The firm employs fundamental and quantitative analysis. GCM Grosvenor Inc. was founded in 1971 and is based in Chicago, Illinois with additional offices in North America, Asia, Australia and Europe.