Head-To-Head Analysis: Moody’s (NYSE:MCO) versus Equus Total Return (NYSE:EQS)

Equus Total Return (NYSE:EQS) and Moody’s (NYSE:MCO) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Risk & Volatility

Equus Total Return has a beta of 0.09, meaning that its stock price is 91% less volatile than the S&P 500. Comparatively, Moody’s has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Valuation & Earnings

This table compares Equus Total Return and Moody’s”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Equus Total Return	$1.37 million	8.46	-$14.16 million	($1.40)	-0.59
Moody’s	$7.72 billion	10.09	$2.46 billion	$15.77	28.51

Moody’s has higher revenue and earnings than Equus Total Return. Equus Total Return 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 and Insider Ownership

92.1% of Moody’s shares are held by institutional investors. 30.5% of Equus Total Return shares are held by company insiders. Comparatively, 0.1% of Moody’s shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Equus Total Return and Moody’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Equus Total Return	1	0	0	0	1.00
Moody’s	0	5	13	1	2.79

Moody’s has a consensus price target of $552.65, indicating a potential upside of 22.91%. Given Moody’s’ stronger consensus rating and higher possible upside, analysts clearly believe Moody’s is more favorable than Equus Total Return.

Profitability

This table compares Equus Total Return and Moody’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Equus Total Return	-1,408.24%	-14.25%	-11.34%
Moody’s	34.25%	80.35%	19.38%

Summary

Moody’s beats Equus Total Return on 14 of the 15 factors compared between the two stocks.

About Equus Total Return

Equus Total Return, Inc. is a business development company (BDC) specializing in leveraged buyouts, management buyouts, corporate partnerships/joint ventures, growth and expansion capital, acquisition financing, roll-up acquisition strategies, operational turnarounds, recapitalizations of existing businesses, special situations, equity and equity-oriented securities issued by privately owned companies, debt securities including subordinate debt, debt convertible into common or preferred stock, or debt combined with warrants and common and preferred stock, and preferred equity financing. It invests in small to mid-sized companies and acts as a lead investor. It invests in technology, telecommunication, financial services, natural resource and industrial manufacturing and services. It invests in companies engaged in the alternative energy, real estate, healthcare, education, e-learning, leisure and entertainment, and foreign investment sector in the United States, China, India, and Europe. It investments include common and preferred stock, debt convertible into common or preferred stock, debt combined with warrants and options, and other rights to acquire common or preferred stock. It seeks to invest in companies between $1 million to $25 million with revenues between $5 million and $150 million with EBITDA between $2 million to $50 million. It seeks to take control and non-control equity positions. Equus Total Return, Inc. was founded in 1991 and is based in Houston, Texas with additional office in Vancouver, Canada.

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.