Critical Survey: Hamilton Lane (NASDAQ:HLNE) and SEI Investments (NASDAQ:SEIC)

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

Institutional & Insider Ownership

70.6% of SEI Investments shares are owned by institutional investors. Comparatively, 97.4% of Hamilton Lane shares are owned by institutional investors. 4.8% of SEI Investments shares are owned by insiders. Comparatively, 22.2% of Hamilton Lane shares are owned 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SEI Investments	31.17%	30.70%	24.76%
Hamilton Lane	32.83%	25.98%	15.56%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SEI Investments	$2.30 billion	5.25	$715.30 million	$5.86	17.11
Hamilton Lane	$758.99 million	6.28	$249.18 million	$5.91	14.53

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

Dividends

SEI Investments pays an annual dividend of $1.04 per share and has a dividend yield of 1.0%. Hamilton Lane pays an annual dividend of $2.40 per share and has a dividend yield of 2.8%. SEI Investments pays out 17.7% of its earnings in the form of a dividend. Hamilton Lane pays out 40.6% 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. SEI Investments has increased its dividend for 34 consecutive years and Hamilton Lane has increased its dividend for 8 consecutive years.

Volatility & Risk

SEI Investments has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500. Comparatively, Hamilton Lane has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for SEI Investments and Hamilton Lane, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SEI Investments	0	1	6	0	2.86
Hamilton Lane	0	3	6	0	2.67

SEI Investments presently has a consensus target price of $116.20, indicating a potential upside of 15.90%. Hamilton Lane has a consensus target price of $134.57, indicating a potential upside of 56.66%. Given Hamilton Lane’s higher probable upside, analysts clearly believe Hamilton Lane is more favorable than SEI Investments.

About SEI Investments

SEI Investments Company is a publicly owned asset management holding company. Through its subsidiaries, the firm provides wealth management, retirement and investment solutions, asset management, asset administration, investment processing outsourcing solutions, financial services, and investment advisory services to its clients. It provides its services to private banks, independent financial advisers, institutional investors, investment managers, investment advisors, wealth management organizations, corporations, retirement scheme sponsors, not-for-profit organizations, hedge fund managers, registered investment advisers, independent broker-dealers, financial planners, life insurance agents, defined-benefit schemes, defined-contribution schemes, endowments, foundations, and board-designated fund, through its subsidiaries. Through its subsidiaries, the firm manages separate client-focused portfolios. It also launches and manages equity, fixed income, and balanced mutual funds, through its subsidiaries. Through its subsidiaries, the firm invests in public equity and fixed income markets. It employs fundamental and quantitative analysis with a focus on top-down and bottom-up analysis to make its investments, through its subsidiaries. SEI Investments Company was founded in 1968 and is based in Oaks, Pennsylvania.

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.