Analyzing Visa (NYSE:V) and Msci (MSCI)

Msci (NYSE: MSCI) and Visa (NYSE:V) are both large-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Valuation and Earnings

This table compares Msci and Visa’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Msci $1.27 billion 12.01 $303.97 million $3.98 43.21
Visa $18.36 billion 15.04 $6.70 billion $3.48 38.81

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

Dividends

Msci pays an annual dividend of $1.52 per share and has a dividend yield of 0.9%. Visa pays an annual dividend of $0.84 per share and has a dividend yield of 0.6%. Msci pays out 38.2% of its earnings in the form of a dividend. Visa pays out 24.1% 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. Msci has raised its dividend for 3 consecutive years and Visa has raised its dividend for 9 consecutive years.

Profitability

This table compares Msci and Visa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Msci 26.14% 109.18% 12.64%
Visa 48.18% 33.90% 13.93%

Insider & Institutional Ownership

92.5% of Msci shares are held by institutional investors. Comparatively, 80.1% of Visa shares are held by institutional investors. 2.4% of Msci shares are held by insiders. Comparatively, 0.1% of Visa shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

Msci has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Visa has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Msci and Visa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Msci 0 2 3 0 2.60
Visa 0 3 28 0 2.90

Msci currently has a consensus price target of $160.20, suggesting a potential downside of 6.84%. Visa has a consensus price target of $139.43, suggesting a potential upside of 3.24%. Given Visa’s stronger consensus rating and higher possible upside, analysts clearly believe Visa is more favorable than Msci.

Summary

Visa beats Msci on 11 of the 17 factors compared between the two stocks.

Msci Company Profile

MSCI Inc., together with its subsidiaries, provides investment decision support tools for the clients to manage their investment processes worldwide. The company operates through four segments: Index, Analytics, ESG, and Real Estate. The Index segment primarily provides equity indexes for use in various areas of the investment process, including index-linked product creation and performance benchmarking, as well as portfolio construction and rebalancing, and asset allocation. The Analytics segment offers risk management, performance attribution, and portfolio management content, applications, and services that provide clients with an integrated view of risk and return, and an analysis of market, credit, liquidity, and counterparty risk across various asset classes, spanning short, medium, and long-term time horizons; and various managed services for clients to address the needs of various specialized areas of the investment community by providing a reporting service and performance reporting tools to institutional consultants and investors in hedge funds. The ESG segment provides products and services that help institutional investors understand how environmental, social, and governance (ESG) factors impact the long-term risk of their investments; and data and ratings products for use in the construction of equity and fixed income indexes to help institutional investors benchmark ESG investment performance and issue index-based investment products, as well as manage, measure, and report on ESG mandates. The Real Estate segment offers real estate performance analysis for funds, investors, managers, and lenders. This segment provides products and services that include research, reporting, and benchmarking; and business intelligence to real estate owners, managers, developers, and brokers. MSCI Inc. was founded in 1998 and is headquartered in New York, New York.

Visa Company Profile

Visa Inc. operates as a payments technology company worldwide. The company facilitates commerce through the transfer of value and information among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a processing network that enables authorization, clearing, and settlement of payment transactions; and offers fraud protection for account holders and assured payment for merchants. The company also offers gateway services for merchants to accept, process, and reconcile payments; manage fraud; and safeguard payment security online, as well as processing services for participating issuers of visa debit, prepaid, and ATM payment products. In addition, it provides digital products, including Visa Checkout that offers consumers an expedited, and secure payment experience for online transactions; and Visa Direct, a push payment product platform, that allows businesses, governments, and consumers to use the Visa network to transfer funds from an originating account to another via a debit, prepaid, or credit card number, as well as Visa token service that replaces the card account numbers from the transaction with a token. Further the company offers corporate (travel) and purchasing card products, as well as value-added services. It provides its services under the Visa, Visa Electron, Interlink, V PAY, and PLUS brands. Visa Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

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