Analyzing Moody’s (NYSE:MCO) & Hamilton Lane (NASDAQ:HLNE)

Hamilton Lane (NASDAQ:HLNE) and Moody’s (NYSE:MCO) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Dividends

Hamilton Lane pays an annual dividend of $2.40 per share and has a dividend yield of 2.9%. Moody’s pays an annual dividend of $4.12 per share and has a dividend yield of 0.9%. Hamilton Lane pays out 36.6% of its earnings in the form of a dividend. Moody’s pays out 26.1% 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. Hamilton Lane has raised its dividend for 8 consecutive years and Moody’s has raised its dividend for 16 consecutive years.

Insider & Institutional Ownership

97.4% of Hamilton Lane shares are owned by institutional investors. Comparatively, 92.1% of Moody’s shares are owned by institutional investors. 24.0% of Hamilton Lane shares are owned by insiders. Comparatively, 0.1% of Moody’s shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Hamilton Lane and Moody’s”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hamilton Lane	$858.37 million	5.42	$249.18 million	$6.56	12.76
Moody’s	$7.72 billion	10.72	$2.46 billion	$15.77	30.29

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Hamilton Lane and Moody’s, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hamilton Lane	0	2	7	1	2.90
Moody’s	0	7	13	0	2.65

Hamilton Lane presently has a consensus price target of $124.00, indicating a potential upside of 48.15%. Moody’s has a consensus price target of $551.26, indicating a potential upside of 15.42%. Given Hamilton Lane’s stronger consensus rating and higher probable upside, equities analysts plainly believe Hamilton Lane is more favorable than Moody’s.

Profitability

This table compares Hamilton Lane and Moody’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hamilton Lane	32.14%	25.10%	15.75%
Moody’s	34.25%	80.35%	19.38%

Risk & Volatility

Hamilton Lane has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Moody’s has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Summary

Moody’s beats Hamilton Lane on 12 of the 18 factors compared between the two stocks.

About Hamilton Lane

Hamilton Lane Incorporated is a private equity firm specializing in early venture, emerging growth, turnaround, middle market, mature, mid-venture, bridge, buyout, distressed/vulture, loan, mezzanine in growth capital companies. It prefers to invest in energy, industrials, consumer discretionary, health care, real estate, information technology, utilities, and consumer services. The firm prefers to invest in Africa/Middle East, Asia/Pacific, Europe, Latin America and Caribbean, United States of America, and Canada. The firm prefers to invest between $1 million and $100 million. It prefers to take majority stake. Hamilton Lane Incorporated was founded in 1991 and is based in Conshohocken, Pennsylvania with additional offices across Europe, North America, Asia Pacific and the Middle East.

About Moody’s

Moody’s Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody’s Analytics and Moody’s Investors Services. The Moody’s Analytics segment develops a range of products and services that support the risk management activities of institutional participants in financial markets. It also offers credit research, credit models and analytics, economics data and models, and structured finance solutions; data sets on companies and securities; and SaaS solutions supporting banking, insurance, and know your customer workflows. The Moody’s Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, as well as structured finance securities. 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.