Head-To-Head Analysis: Axos Financial (NYSE:AX) and Moody’s (NYSE:MCO)

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

Valuation and Earnings

This table compares Moody’s and Axos Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moody’s	$7.72 billion	11.57	$2.46 billion	$13.95	36.64
Axos Financial	$1.95 billion	2.91	$432.91 million	$8.23	12.08

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

Institutional & Insider Ownership

92.1% of Moody’s shares are owned by institutional investors. Comparatively, 83.8% of Axos Financial shares are owned by institutional investors. 0.1% of Moody’s shares are owned by company insiders. Comparatively, 4.8% of Axos Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Moody’s and Axos Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moody’s	31.69%	70.97%	17.98%
Axos Financial	22.53%	16.48%	1.72%

Volatility and Risk

Moody’s has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, Axos Financial has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Moody’s and Axos Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moody’s	0	5	14	1	2.80
Axos Financial	0	2	4	2	3.00

Moody’s presently has a consensus price target of $548.47, indicating a potential upside of 7.30%. Axos Financial has a consensus price target of $110.33, indicating a potential upside of 10.95%. Given Axos Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Axos Financial is more favorable than Moody’s.

Summary

Moody’s beats Axos Financial on 11 of the 15 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 Axos Financial

Axos Financial, Inc., together with its subsidiaries, provides consumer and business banking products in the United States. It operates through two segments, Banking Business and Securities Business. The company offers deposits products, including consumer and business checking, demand, savings, time deposit, money market, zero balance, and insured cash sweep accounts. It also provides residential single family, multifamily, and commercial mortgage loans; commercial real estate secured loans; commercial and industrial non-real estate, asset-backed, lines of credit, and term loans; automobile loans; fixed rate unsecured loans; and other loans, such as structure settlements, small business administration consumer loans, and securities-backed loans. In addition, the company offers ACH origination, wire transfer, commercial check printing, business bill pay and account transfer; remote deposit capture, mobile deposit, lockbox, merchant, and online payment portal; concierge banking; mobile and text message banking; and payment services, as well as debit and credit cards, and digital wallets. Further, it provides disclosed clearing services; back-office services, such as record keeping, trade reporting, accounting, general back-office support, securities and margin lending, reorganization assistance, and custody of securities; and financing to brokerage customers. The company was formerly known as BofI Holding, Inc. and changed its name to Axos Financial, Inc. in September 2018. Axos Financial, Inc. was incorporated in 1999 and is based in Las Vegas, Nevada.