BlackRock (NYSE:BLK) versus Sprott (NYSE:SII) Critical Survey

BlackRock (NYSE:BLK) and Sprott (NYSE:SII) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BlackRock	26.64%	14.80%	5.04%
Sprott	23.26%	15.01%	11.97%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for BlackRock and Sprott, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackRock	0	3	17	0	2.85
Sprott	0	2	3	0	2.60

BlackRock currently has a consensus price target of $1,316.18, indicating a potential upside of 24.24%. Sprott has a consensus price target of $132.00, indicating a potential upside of 36.38%. Given Sprott’s higher probable upside, analysts plainly believe Sprott is more favorable than BlackRock.

Volatility and Risk

BlackRock has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, Sprott has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Dividends

BlackRock pays an annual dividend of $20.84 per share and has a dividend yield of 2.0%. Sprott pays an annual dividend of $1.60 per share and has a dividend yield of 1.7%. BlackRock pays out 53.6% of its earnings in the form of a dividend. Sprott pays out 82.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BlackRock has raised its dividend for 16 consecutive years and Sprott has raised its dividend for 1 consecutive years. BlackRock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

80.7% of BlackRock shares are held by institutional investors. Comparatively, 28.3% of Sprott shares are held by institutional investors. 2.0% of BlackRock shares are held by insiders. Comparatively, 18.3% of Sprott shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares BlackRock and Sprott”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackRock	$20.41 billion	8.05	$6.37 billion	$38.89	27.24
Sprott	$178.65 million	13.97	$49.29 million	$1.95	49.64

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

Summary

BlackRock beats Sprott on 11 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 Sprott

Sprott Inc. is a publicly owned asset management holding company. Through its subsidiaries, the firm provides asset management, portfolio management, wealth management, fund management, and administrative and consulting services to its clients. It offers mutual funds, hedge funds, and offshore funds, along with managed accounts. Further, the firm also provides broker-dealer activities. Sprott Inc. was formed on February 13, 2008 and is based in Toronto, Canada.