Financial Review: Moody’s (NYSE:MCO) & Freedom (NASDAQ:FRHC)

Freedom (NASDAQ:FRHC) and Moody’s (NYSE:MCO) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Valuation & Earnings

This table compares Freedom and Moody’s”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freedom	$2.05 billion	4.18	$84.65 million	$0.02	7,001.00
Moody’s	$7.72 billion	9.71	$2.46 billion	$13.95	30.75

Moody’s has higher revenue and earnings than Freedom. Moody’s is trading at a lower price-to-earnings ratio than Freedom, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Freedom and Moody’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freedom	0.13%	0.21%	0.03%
Moody’s	31.69%	70.97%	17.98%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Freedom and Moody’s, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freedom	1	0	0	0	1.00
Moody’s	0	6	12	1	2.74

Freedom currently has a consensus price target of $138.00, suggesting a potential downside of 1.44%. Moody’s has a consensus price target of $544.29, suggesting a potential upside of 26.90%. Given Moody’s’ stronger consensus rating and higher probable upside, analysts clearly believe Moody’s is more favorable than Freedom.

Insider & Institutional Ownership

1.3% of Freedom shares are held by institutional investors. Comparatively, 92.1% of Moody’s shares are held by institutional investors. 70.0% of Freedom shares are held by insiders. Comparatively, 0.1% of Moody’s shares are held by 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.

Risk & Volatility

Freedom has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, Moody’s has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Summary

Moody’s beats Freedom on 13 of the 15 factors compared between the two stocks.

About Freedom

Freedom Holding Corp., through its subsidiaries, provides securities brokerage, securities dealing, market making, investment research, investment counseling, and investment banking services. It offers retail brokerage services for exchange-traded and over-the-counter corporate equity and debt securities, money market instruments, exchange traded options and futures contracts, government bonds, and mutual funds; securities trading; underwriting services; margin lending services collateralized by securities and cash in the customer’s account; various investment education and training courses; investment research services; and commercial banking services, including payment cards, digital mortgages, and digital business and digital auto loans, as well as Freedom Box, a package of payment acquiring services. The company also provides capital raising solutions for corporate clients through initial public offerings and follow-on offerings; and debt capital markets solutions that focuses on structuring and distributing private and public debt for various purposes, including buyouts, acquisitions, growth capital financings, and recapitalizations, as well as information processing services. In addition, it facilitates repurchase and reverse repurchase agreements in proprietary trading activities; and covers short positions and settle other securities obligations to accommodate customers’ needs and finance its inventory positions. Further, the company offers proprietary trading and investment services, as well as insurance products; and Tradernet software platform for client margin risk evaluation and middle office security transfer requests. It operates in Central Asia, Eastern Europe, rest of Europe, the United States, Russia, the Middle East, and Caucasus. The company was formerly known as BMB Munai, Inc. and changed its name to Freedom Holding Corp. Freedom Holding Corp. was incorporated in 1981 and is headquartered in Almaty, Kazakhstan.

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.