Morgan Stanley (NYSE: BLK) and BlackRock (NYSE:BLK) are both large-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.
Valuation and Earnings
This table compares Morgan Stanley and BlackRock’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Morgan Stanley||$43.64 billion||1.93||$6.11 billion||$3.60||13.44|
|BlackRock||$12.49 billion||6.06||$4.97 billion||$22.60||20.98|
Morgan Stanley has higher revenue and earnings than BlackRock. Morgan Stanley is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
85.9% of Morgan Stanley shares are owned by institutional investors. Comparatively, 84.1% of BlackRock shares are owned by institutional investors. 0.2% of Morgan Stanley shares are owned by company insiders. Comparatively, 1.8% of BlackRock shares are owned 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.
This is a summary of current ratings and recommmendations for Morgan Stanley and BlackRock, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Morgan Stanley presently has a consensus target price of $57.33, suggesting a potential upside of 18.53%. BlackRock has a consensus target price of $592.45, suggesting a potential upside of 24.95%. Given BlackRock’s stronger consensus rating and higher probable upside, analysts plainly believe BlackRock is more favorable than Morgan Stanley.
Risk & Volatility
Morgan Stanley has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500. Comparatively, BlackRock has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500.
This table compares Morgan Stanley and BlackRock’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Morgan Stanley pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. BlackRock pays an annual dividend of $11.52 per share and has a dividend yield of 2.4%. Morgan Stanley pays out 33.3% of its earnings in the form of a dividend. BlackRock pays out 51.0% 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. Morgan Stanley has increased its dividend for 4 consecutive years and BlackRock has increased its dividend for 8 consecutive years. Morgan Stanley is clearly the better dividend stock, given its higher yield and lower payout ratio.
BlackRock beats Morgan Stanley on 11 of the 17 factors compared between the two stocks.
About Morgan Stanley
Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. The company operates through three segments: Institutional Securities, Wealth Management, and Investment Management. The Institutional Securities segment offers capital raising and financial advisory services, including services related to the underwriting of debt, equity, and other securities, as well as advice on mergers and acquisitions, restructurings, real estate, and project finance. This segment also provides sales and trading services, such as sales, financing, and market-making services in equity securities and fixed income products consisting of foreign exchange and commodities, as well as prime brokerage services; corporate loans, commercial and residential mortgage lending, and asset-backed lending; financing for equities and commodities customers; loans to municipalities; and investment and research services. The Wealth Management segment offers various financial services and solutions covering brokerage and investment advisory services, financial and wealth planning services, annuity and insurance products, credit and other lending products, and banking and retirement plan services to individual investors and small to medium-sized businesses/institutions. The Investment Management segment provides various investment strategies and products comprising equity, fixed income, liquidity, and alternative/other products to defined benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, and third-party fund sponsors and corporations through a network of institutional and intermediary channels. Morgan Stanley was founded in 1924 and is headquartered in New York, New York.
BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.
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