Reviewing Moody’s (MCO) & Its Peers

Moody’s (NYSE:MCO) is one of 1,744 public companies in the “Capital Markets” industry, but how does it compare to its rivals? We will compare Moody’s to related businesses based on the strength of its risk, profitability, earnings, institutional ownership, analyst recommendations, dividends and valuation.

Dividends

Moody’s pays an annual dividend of $4.12 per share and has a dividend yield of 0.8%. Moody’s pays out 25.1% of its earnings in the form of a dividend. As a group, “Capital Markets” companies pay a dividend yield of 3.2% and pay out 30.1% of their earnings in the form of a dividend. Moody’s has increased its dividend for 16 consecutive years.

Valuation and Earnings

This table compares Moody’s and its rivals gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Moody’s	$7.72 billion	$2.46 billion	30.02
Moody’s Competitors	$5.23 billion	$396.05 million	15.83

Moody’s has higher revenue and earnings than its rivals. Moody’s is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

92.1% of Moody’s shares are owned by institutional investors. Comparatively, 30.5% of shares of all “Capital Markets” companies are owned by institutional investors. 0.1% of Moody’s shares are owned by company insiders. Comparatively, 13.0% of shares of all “Capital Markets” companies are owned by company 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.

Profitability

This table compares Moody’s and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moody’s	35.26%	84.76%	19.65%
Moody’s Competitors	304.57%	79.21%	3.63%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Moody’s and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moody’s	0	7	13	0	2.65
Moody’s Competitors	5529	20079	22413	638	2.37

Moody’s currently has a consensus target price of $552.63, indicating a potential upside of 12.19%. As a group, “Capital Markets” companies have a potential upside of 27.21%. Given Moody’s’ rivals higher probable upside, analysts plainly believe Moody’s has less favorable growth aspects than its rivals.

Risk & Volatility

Moody’s has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, Moody’s’ rivals have a beta of 0.82, indicating that their average stock price is 18% less volatile than the S&P 500.

Summary

Moody’s beats its rivals on 10 of the 15 factors compared.

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.