Hennessy Advisors (NASDAQ:HNNA) vs. XP (NASDAQ:XP) Critical Contrast

Hennessy Advisors (NASDAQ:HNNA) and XP (NASDAQ:XP) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hennessy Advisors	N/A	N/A	N/A
XP	N/A	N/A	N/A

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hennessy Advisors	N/A	N/A	N/A	$1.04	9.86
XP	$8.42 billion	1.02	$1.03 billion	$1.91	8.36

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Hennessy Advisors and XP, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hennessy Advisors	0	1	0	0	2.00
XP	0	3	4	0	2.57

XP has a consensus target price of $26.80, suggesting a potential upside of 67.92%. Given XP’s stronger consensus rating and higher probable upside, analysts plainly believe XP is more favorable than Hennessy Advisors.

Insider and Institutional Ownership

10.3% of Hennessy Advisors shares are held by institutional investors. Comparatively, 59.2% of XP shares are held by institutional investors. 36.0% of Hennessy Advisors shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

XP beats Hennessy Advisors on 6 of the 7 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 XP

XP Inc. provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients. The company also offers XP Educação, an online financial education portal that offers seminars, classes, and learning tools to help teach individuals on topics, such as basics of investing, techniques, and investment strategies, as well as insurance brokerage services. In addition, it operates XP Platform, an open product platform that provides clients to access investment products in the market, including equity and fixed income securities, mutual and hedge funds, structured products, life insurance, pension plans, real-estate investment funds, and others. The company was founded in 2001 and is based in São Paulo, Brazil.