Head-To-Head Comparison: BlackRock (NYSE:BLK) vs. MSCI (NYSE:MSCI)

BlackRock (NYSE:BLK) and MSCI (NYSE:MSCI) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Dividends

BlackRock pays an annual dividend of $22.92 per share and has a dividend yield of 2.2%. MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.5%. BlackRock pays out 54.8% of its earnings in the form of a dividend. MSCI pays out 44.9% 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. BlackRock has raised its dividend for 16 consecutive years and MSCI has raised its dividend for 11 consecutive years. BlackRock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares BlackRock and MSCI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BlackRock	24.09%	14.90%	4.97%
MSCI	40.74%	-55.19%	24.90%

Risk and Volatility

BlackRock has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500. Comparatively, MSCI has a beta of 1.24, indicating that its stock price is 24% more volatile than the S&P 500.

Institutional and Insider Ownership

80.7% of BlackRock shares are held by institutional investors. Comparatively, 90.0% of MSCI shares are held by institutional investors. 1.9% of BlackRock shares are held by insiders. Comparatively, 3.8% of MSCI shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackRock	$24.22 billion	6.78	$5.55 billion	$41.84	25.33
MSCI	$3.13 billion	12.44	$1.20 billion	$18.28	29.34

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for BlackRock and MSCI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackRock	0	3	14	1	2.89
MSCI	0	0	11	1	3.08

BlackRock currently has a consensus price target of $1,304.35, indicating a potential upside of 23.09%. MSCI has a consensus price target of $709.08, indicating a potential upside of 32.20%. Given MSCI’s stronger consensus rating and higher probable upside, analysts clearly believe MSCI is more favorable than BlackRock.

Summary

MSCI beats BlackRock on 9 of the 17 factors compared between the two stocks.

About BlackRock

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.

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.