Head to Head Analysis: MSCI (NYSE:MSCI) and Hennessy Advisors (NASDAQ:HNNA)

Hennessy Advisors (NASDAQ:HNNA) and MSCI (NYSE:MSCI) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Dividends

Hennessy Advisors pays an annual dividend of $0.60 per share and has a dividend yield of 5.9%. MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.4%. Hennessy Advisors pays out 57.1% of its earnings in the form of a dividend. MSCI pays out 46.8% 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 11 consecutive years.

Valuation & Earnings

This table compares Hennessy Advisors and MSCI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hennessy Advisors	$33.01 million	2.43	$9.96 million	$1.05	9.67
MSCI	$3.13 billion	14.00	$1.20 billion	$17.51	34.44

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

Insider & Institutional Ownership

10.3% of Hennessy Advisors shares are owned by institutional investors. Comparatively, 90.0% of MSCI shares are owned by institutional investors. 36.0% of Hennessy Advisors shares are owned by insiders. Comparatively, 3.8% of MSCI shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Hennessy Advisors and MSCI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hennessy Advisors	0	1	0	0	2.00
MSCI	0	0	10	1	3.09

MSCI has a consensus price target of $697.00, indicating a potential upside of 15.59%. Given MSCI’s stronger consensus rating and higher probable upside, analysts clearly believe MSCI is more favorable than Hennessy Advisors.

Risk & Volatility

Hennessy Advisors has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, MSCI has a beta of 1.24, meaning that its share price is 24% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hennessy Advisors	25.40%	8.53%	5.25%
MSCI	40.74%	-65.48%	24.49%

Summary

MSCI beats Hennessy Advisors on 15 of the 18 factors compared between the two stocks.

About Hennessy Advisors

Hennessy Advisors, Inc. is an employee owned investment manager. It provides its services to Hennessy Funds and investment companies. The firm launches and manages equity, fixed income, and balanced mutual funds. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth stocks of companies. It conducts in-house research to make its investments. Hennessy Advisors, Inc. was founded in 1989 and is based in Novato, California with additional offices in Boston, Massachusetts and Chapel Hill, North Carolina.

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.