Contrasting Westwood Holdings Group (NYSE:WHG) & MSCI (NYSE:MSCI)

MSCI (NYSE:MSCI) and Westwood Holdings Group (NYSE:WHG) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations for MSCI and Westwood Holdings Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSCI	0	1	9	1	3.00
Westwood Holdings Group	0	0	1	0	3.00

MSCI presently has a consensus price target of $692.70, indicating a potential upside of 15.84%. Given MSCI’s higher probable upside, equities research analysts clearly believe MSCI is more favorable than Westwood Holdings Group.

Valuation & Earnings

This table compares MSCI and Westwood Holdings Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSCI	$3.24 billion	13.56	$1.20 billion	$17.51	34.15
Westwood Holdings Group	$97.76 million	1.57	$7.06 million	$0.79	20.45

MSCI has higher revenue and earnings than Westwood Holdings Group. Westwood Holdings Group is trading at a lower price-to-earnings ratio than MSCI, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

90.0% of MSCI shares are held by institutional investors. Comparatively, 56.6% of Westwood Holdings Group shares are held by institutional investors. 3.8% of MSCI shares are held by company insiders. Comparatively, 17.4% of Westwood Holdings Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.4%. Westwood Holdings Group pays an annual dividend of $0.60 per share and has a dividend yield of 3.7%. MSCI pays out 46.8% of its earnings in the form of a dividend. Westwood Holdings Group pays out 75.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. MSCI has raised its dividend for 11 consecutive years.

Profitability

This table compares MSCI and Westwood Holdings Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSCI	40.74%	-65.48%	24.49%
Westwood Holdings Group	7.22%	8.24%	6.85%

Volatility and Risk

MSCI has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500. Comparatively, Westwood Holdings Group has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Summary

MSCI beats Westwood Holdings Group on 14 of the 17 factors compared between the two stocks.

About MSCI

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.

About Westwood Holdings Group

Westwood Holdings Group, Inc., through its subsidiaries, manages investment assets and provides services for its clients. The company operates in two segments, Advisory and Trust. The Advisory segment provides investment advisory services to corporate retirement plans, public retirement plans, endowments, foundations, individuals, and the Westwood Funds; and investment sub-advisory services to mutual funds, pooled investment vehicles, and its Trust segment. The Trust segment offers trust and custodial services; and participates in common trust funds that it sponsors to institutions and high net worth individuals. Westwood Holdings Group, Inc. was founded in 1983 and is based in Dallas, Texas.