Monroe Capital (NASDAQ: MORN) and Morningstar (NASDAQ:MORN) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.
Insider & Institutional Ownership
25.2% of Monroe Capital shares are owned by institutional investors. Comparatively, 39.6% of Morningstar shares are owned by institutional investors. 1.9% of Monroe Capital shares are owned by insiders. Comparatively, 57.5% of Morningstar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Monroe Capital and Morningstar’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Monroe Capital||$51.11 million||5.48||$12.15 million||$1.40||9.79|
|Morningstar||$911.70 million||6.53||$136.90 million||N/A||N/A|
Morningstar has higher revenue and earnings than Monroe Capital.
This table compares Monroe Capital and Morningstar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings for Monroe Capital and Morningstar, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Monroe Capital currently has a consensus price target of $15.00, indicating a potential upside of 9.41%. Given Monroe Capital’s higher possible upside, equities analysts clearly believe Monroe Capital is more favorable than Morningstar.
Volatility & Risk
Monroe Capital has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, Morningstar has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.
Monroe Capital pays an annual dividend of $1.40 per share and has a dividend yield of 10.2%. Morningstar pays an annual dividend of $1.00 per share and has a dividend yield of 0.7%. Monroe Capital pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Morningstar has raised its dividend for 6 consecutive years.
Morningstar beats Monroe Capital on 11 of the 15 factors compared between the two stocks.
About Monroe Capital
Monroe Capital Corporation is a business development company specializing in senior, unitranche and junior secured debt and to a lesser extent, unsecured debt and equity investments, and buyouts in middle-market companies. The fund prefers to invest in casinos and gaming, broadcasting, publishing, alcoholic beverage and tobacco distribution, oil and gas, insurance, pharmaceuticals and bio sciences, aerospace and defense, commercial printing, natural rubber, glass, container and packaging, metals and mining, and real estate. It focuses to invest in the United States and Canada. The fund focuses on companies with a maximum of $25 million in EBITDA per year.
Morningstar, Inc. provides independent investment research services in North America, Europe, Australia, and Asia. It offers a line of data, research, and software tools on a range of investment offerings, including managed investment products, publicly listed companies, fixed income securities, private capital markets, and real-time global market data for financial advisors, asset managers, retirement plan providers and sponsors, and individual and institutional investors. The company offers Morningstar Data, an investment data spanning various investment databases, including pricing and commodity data; Morningstar Direct, an institutional investment research platform; investment management solutions, which include Morningstar Managed Portfolios, the strategist models on third-party managed account platforms, as well as services for institutional asset management, asset allocation, and manager selection; institutional asset management services for asset management firms, broker-dealers, and insurance providers; Morningstar Advisor Workstation, a Web-based investment planning system; and Morningstar.com, a Website for individual investors. It also provides Morningstar Enterprise Components, a set of tools and capabilities that builds customized Websites or enhances existing solutions; Morningstar Research, which includes equity research and manager research; Morningstar Credit Ratings that provides new issue and surveillance ratings and analysis for structured credits, as well as operational risk assessment services; Morningstar Indexes, a set of investment indexes; workplace solutions, such as retirement advice and managed accounts, fiduciary services, and custom models; a mobile application, excel plug-in, data feeds, and data solutions; equity and manager research, and credit rating services; and institutional asset management, asset allocation, and manager selection services. The company was founded in 1984 and is headquartered in Chicago, Illinois.
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