State Street (NYSE:STT) and PhenixFIN (NYSE:PFX) Critical Comparison

State Street (NYSE:STT) and PhenixFIN (NYSE:PFX) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Insider and Institutional Ownership

87.4% of State Street shares are owned by institutional investors. Comparatively, 43.3% of PhenixFIN shares are owned by institutional investors. 0.3% of State Street shares are owned by insiders. Comparatively, 25.2% of PhenixFIN shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

State Street has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, PhenixFIN has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500.

Dividends

State Street pays an annual dividend of $3.36 per share and has a dividend yield of 1.8%. PhenixFIN pays an annual dividend of $0.48 per share and has a dividend yield of 1.0%. State Street pays out 29.6% of its earnings in the form of a dividend. PhenixFIN pays out 19.9% 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. State Street has raised its dividend for 13 consecutive years. State Street is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for State Street and PhenixFIN, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
State Street	0	5	8	3	2.88
PhenixFIN	0	0	0	1	4.00

State Street presently has a consensus target price of $185.38, indicating a potential upside of 1.54%. Given State Street’s higher possible upside, analysts plainly believe State Street is more favorable than PhenixFIN.

Profitability

This table compares State Street and PhenixFIN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
State Street	15.02%	15.26%	0.96%
PhenixFIN	72.98%	2.95%	1.68%

Valuation and Earnings

This table compares State Street and PhenixFIN”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
State Street	$22.63 billion	2.22	$2.94 billion	$11.34	16.10
PhenixFIN	$14.16 million	6.28	$18.62 million	$2.41	19.09

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

Summary

State Street beats PhenixFIN on 12 of the 18 factors compared between the two stocks.

About State Street

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody, accounting, regulatory reporting, investor, and performance and analytics; middle office products, such as IBOR, transaction management, loans, cash, derivatives and collateral, record keeping, and client reporting and investment analytics; finance leasing; foreign exchange, and brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded funds under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds, UCITS, hedge funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.

About PhenixFIN

PhenixFIN Corporation is a business development company. The firm seeks to invest in privately negotiated debt and equity securities of small and middle market companies. It primarily invests in the following sectors: business services; buildings and real estate; automobile; oil and gas; aerospace and defense; home and office furnishings, housewares, and durable consumer products; healthcare, education and childcare; personal, food, and miscellaneous services; retail stores, diversified or conglomerate manufacturing; telecommunications; mining, steel, iron, and non-precious metals; leisure, amusement, motion pictures, and entertainment; chemicals, plastics, and rubber; finance; personal and nondurable consumer products (manufacturing only); beverage, food, and tobacco; containers, packaging, and glass; structure finance securities; machinery (non-agriculture, non-construction, non-electric); diversified or conglomerate service; restaurant and franchise; electronics; and cargo transport. The fund seeks to invest in companies located in North America. The fund targets private debt transactions in companies with enterprise values or asset values between $25 million and $250 million. The fund seeks to invest in companies with debt investment values between $10 million and $50 million. It exits its investments between three years and seven years; it holds most of its investments to maturity or repayment, but may realize or sell some investments earlier. The fund may take a board seat on its investee companies and can also offer managerial assistance to certain portfolio companies. It structures its investments as first lien senior secured loans, second lien senior secured loans, senior secured notes, senior subordinated notes, subordinate notes, unitranche loans, and seeks warrants or other equity participation. The fund may co-invest in privately negotiated transactions under certain conditions. PhenixFIN Corporation was founded in 2010 and is headquartered in New York, New York.