Critical Survey: CTT Correios de Portugal (OTCMKTS:CTTPY) & StepStone Group (NASDAQ:STEP)

StepStone Group (NASDAQ:STEP) and CTT Correios de Portugal (OTCMKTS:CTTPY) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Profitability

This table compares StepStone Group and CTT Correios de Portugal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
StepStone Group	-40.06%	21.53%	5.22%
CTT Correios de Portugal	4.13%	16.54%	0.88%

Institutional & Insider Ownership

55.5% of StepStone Group shares are held by institutional investors. 16.5% of StepStone 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.

Earnings and Valuation

This table compares StepStone Group and CTT Correios de Portugal”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
StepStone Group	$1.17 billion	6.30	-$179.56 million	($8.00)	-7.82
CTT Correios de Portugal	$1.20 billion	0.91	$49.28 million	$0.82	19.80

CTT Correios de Portugal has higher revenue and earnings than StepStone Group. StepStone Group is trading at a lower price-to-earnings ratio than CTT Correios de Portugal, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

StepStone Group has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500. Comparatively, CTT Correios de Portugal has a beta of -0.1, meaning that its stock price is 110% less volatile than the S&P 500.

Dividends

StepStone Group pays an annual dividend of $1.12 per share and has a dividend yield of 1.8%. CTT Correios de Portugal pays an annual dividend of $0.18 per share and has a dividend yield of 1.1%. StepStone Group pays out -14.0% of its earnings in the form of a dividend. CTT Correios de Portugal pays out 22.0% 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. StepStone Group has raised its dividend for 3 consecutive years. StepStone Group 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 for StepStone Group and CTT Correios de Portugal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
StepStone Group	1	3	4	1	2.56
CTT Correios de Portugal	0	0	0	0	0.00

StepStone Group currently has a consensus target price of $74.57, suggesting a potential upside of 19.20%. Given StepStone Group’s stronger consensus rating and higher probable upside, research analysts clearly believe StepStone Group is more favorable than CTT Correios de Portugal.

Summary

StepStone Group beats CTT Correios de Portugal on 13 of the 18 factors compared between the two stocks.

About StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.

About CTT Correios de Portugal

CTT – Correios De Portugal, S.A., together with its subsidiaries, provides postal and financial services worldwide. It operates through Mail, Express & Parcels, Financial Services & Retail, and Bank segments. The company offers courier and urgent mail transport services; postal financial services; and banking services. It also engages in the business of payments related to collection of invoices and fines. In addition, the company enables the payment of various services and utilities through a network of approximately 5,000 agents covering business outlets as stationery stores, tobacco shops, kiosks, and supermarkets. It operates a retail network of 566 post offices; 1,808 postal agencies; 223 postal delivery offices; 4,576 postal delivery routes; and a fleet of 3,925 vehicles. The company was formerly known as Correio Publico. CTT – Correios De Portugal, S.A. was founded in 1520 and is headquartered in Lisbon, Portugal.