Moody’s (MCO) and Dun & Bradstreet (DNB) Head-To-Head Contrast

Moody’s (NYSE: MCO) and Dun & Bradstreet (NYSE:DNB) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, institutional ownership, dividends, analyst recommendations, risk and earnings.

Valuation and Earnings

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This table compares Moody’s and Dun & Bradstreet’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Moody’s $4.20 billion 7.23 $1.00 billion $6.07 26.19
Dun & Bradstreet $1.74 billion 2.45 $140.90 million $7.36 15.70

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

Dividends

Moody’s pays an annual dividend of $1.76 per share and has a dividend yield of 1.1%. Dun & Bradstreet pays an annual dividend of $2.09 per share and has a dividend yield of 1.8%. Moody’s pays out 29.0% of its earnings in the form of a dividend. Dun & Bradstreet pays out 28.4% 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. Moody’s has raised its dividend for 8 consecutive years and Dun & Bradstreet has raised its dividend for 11 consecutive years. Dun & Bradstreet is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Moody’s and Dun & Bradstreet, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Moody’s 0 7 3 0 2.30
Dun & Bradstreet 0 3 2 0 2.40

Moody’s presently has a consensus target price of $166.40, suggesting a potential upside of 4.66%. Dun & Bradstreet has a consensus target price of $129.00, suggesting a potential upside of 11.63%. Given Dun & Bradstreet’s stronger consensus rating and higher probable upside, analysts clearly believe Dun & Bradstreet is more favorable than Moody’s.

Risk & Volatility

Moody’s has a beta of 1.26, suggesting that its stock price is 26% more volatile than the S&P 500. Comparatively, Dun & Bradstreet has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500.

Institutional and Insider Ownership

88.5% of Moody’s shares are owned by institutional investors. Comparatively, 91.5% of Dun & Bradstreet shares are owned by institutional investors. 1.0% of Moody’s shares are owned by insiders. Comparatively, 0.4% of Dun & Bradstreet shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Moody’s and Dun & Bradstreet’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Moody’s 23.80% -319.45% 16.19%
Dun & Bradstreet 8.09% -30.74% 11.75%

Summary

Moody’s beats Dun & Bradstreet on 9 of the 17 factors compared between the two stocks.

Moody’s Company Profile

Moody's Corporation provides credit ratings; and credit, capital markets, and economic related research, data, and analytical tools worldwide. It operates through two segments, Moody's Investors Service and Moody's Analytics. The Moody's Investors Service segment publishes credit ratings on various debt obligations and entities that issue such obligations comprising various corporate and governmental obligations, structured finance securities, and commercial paper programs. This segment provides ratings in approximately 120 countries. Its ratings are disseminated through press releases to the public through print and electronic media, including the Internet and real-time information systems for use by securities traders and investors. As of December 31, 2017, this segment had ratings relationships with approximately 4,700 non-financial corporate issuers; 4,100 financial institutions issuers; 18,000 sovereign, sub-sovereign, and supranational public finance issuers; and 1,000 infrastructure and project finance issuers, as well as rated 11,000 structured finance transactions. The Moody's Analytics segment develops products and services that support financial analysis and risk management activities of institutional participants in financial markets; and distributes research and data, such as research on debt issuers, industry studies, and commentary on topical credit related events. This segment also offers economic research, and credit data and analytical tools; software solutions and related risk management services; and offshore research and analytical services with financial training and certification programs. 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.

Dun & Bradstreet Company Profile

The Dun & Bradstreet Corporation provides commercial data, analytics, and insight on businesses. The company operates through two segments, Americas and Non-Americas. It offers risk management solutions comprising trade credit solutions, such as The D&B Credit Suite, which includes D&B Credit and DNBi, subscription-based online applications that offer customers real time access to information, comprehensive monitoring, and portfolio analysis; various business information reports; and D&B Credibility solutions primarily for small businesses; Supplier Risk Manager, an online application that helps businesses mitigate supply chain risk; Compliance product suite that includes D&B Onboard and D&B Compliance Check, which helps customers comply with anti-money laundering and anti-bribery and corruption regulations through onboarding, screening, and monitoring of customers and third parties; and D&B Direct, an API that enables data integration inside enterprise applications, such as ERP, and enables master data management and toolkit. The company also offers sales acceleration solutions that enable B2B sales and marketing professionals to accelerate sales, enhance go-to-market activity, engage in a meaningful way, and close business faster; MDR Integrated Education Marketing, a source for education data services, sales tools, digital marketing solutions, and market research. In addition, it offers marketing solutions, such as Optimizer, a master data solution; D&B Master Data that empowers customers to understand business relationships; D&B Audience Targeting, which helps customers serve the right ads to the right audiences; and D&B Visitor Intelligence that helps B2B marketers unmask anonymous Web traffic in real-time. It serves customers in communication, technology, government, strategic financial services, retail, telecommunications, and manufacturing. The Dun & Bradstreet Corporation was founded in 1841 and is headquartered in Short Hills, New Jersey.

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