Diamond Hill Investment Group (NASDAQ:DHIL) versus Charles Schwab (NYSE:SCHW) Head-To-Head Comparison

Diamond Hill Investment Group (NASDAQ:DHIL) and Charles Schwab (NYSE:SCHW) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

65.5% of Diamond Hill Investment Group shares are held by institutional investors. Comparatively, 84.4% of Charles Schwab shares are held by institutional investors. 4.6% of Diamond Hill Investment Group shares are held by insiders. Comparatively, 6.3% of Charles Schwab shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Diamond Hill Investment Group and Charles Schwab’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Diamond Hill Investment Group	31.71%	21.38%	14.72%
Charles Schwab	33.68%	19.30%	1.66%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Diamond Hill Investment Group and Charles Schwab, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Diamond Hill Investment Group	0	0	0	0	0.00
Charles Schwab	2	4	16	0	2.64

Charles Schwab has a consensus price target of $100.00, suggesting a potential upside of 4.69%. Given Charles Schwab’s stronger consensus rating and higher probable upside, analysts plainly believe Charles Schwab is more favorable than Diamond Hill Investment Group.

Earnings and Valuation

This table compares Diamond Hill Investment Group and Charles Schwab”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Diamond Hill Investment Group	$151.10 million	2.55	$43.18 million	$17.58	8.02
Charles Schwab	$19.61 billion	8.84	$5.94 billion	$3.72	25.68

Charles Schwab has higher revenue and earnings than Diamond Hill Investment Group. Diamond Hill Investment Group is trading at a lower price-to-earnings ratio than Charles Schwab, indicating that it is currently the more affordable of the two stocks.

Dividends

Diamond Hill Investment Group pays an annual dividend of $6.00 per share and has a dividend yield of 4.3%. Charles Schwab pays an annual dividend of $1.08 per share and has a dividend yield of 1.1%. Diamond Hill Investment Group pays out 34.1% of its earnings in the form of a dividend. Charles Schwab pays out 29.0% 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. Charles Schwab has raised its dividend for 1 consecutive years.

Volatility & Risk

Diamond Hill Investment Group has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Charles Schwab has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Summary

Charles Schwab beats Diamond Hill Investment Group on 13 of the 17 factors compared between the two stocks.

About Diamond Hill Investment Group

Diamond Hill Investment Group, Inc., through its subsidiary, Diamond Hill Capital Management, Inc., provides investment advisory and fund administration services in the United States. It offers investment advisory and related services to clients through pooled vehicles, such as private fund; separately managed accounts; collective investment trusts; and other pooled vehicles, including sub-advised funds and model delivery programs. The company also provides fund administration services comprising portfolio and regulatory compliance, treasury and financial oversight, and general business management and governance of the funds, as well as oversight of back-office service providers, which include the custodian, fund accountant, and transfer agent. Diamond Hill Investment Group, Inc. was incorporated in 1990 and is based in Columbus, Ohio.

About Charles Schwab

The Charles Schwab Corporation, together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services in the United States and internationally. The company operates in two segments, Investor Services and Advisor Services. It offers brokerage accounts with equity and fixed income trading, margin lending, options trading, futures and forex trading, and cash management capabilities, including certificates of deposit; third-party mutual funds through the Mutual Fund Marketplace and Mutual Fund OneSource service, as well as mutual fund trading and clearing services to broker-dealers; exchange-traded funds; advisory solutions for managed portfolios, separately managed accounts, customized personal advice for tailored portfolios, specialized planning, and full-time portfolio management; banking products comprising checking and savings accounts, first lien residential real estate mortgage loans, home equity lines of credit, and pledged asset lines; and trust custody services, personal trust reporting services, and administrative trustee services. It also provides digital retirement calculators; integrated web-, mobile-, and software-based trading platforms, real-time market data, options trading, premium research, and multi-channel access; self-service education and support tools; online research and analysis tools; equity compensation plan sponsors full-service recordkeeping for stock plans, stock options, restricted stock, performance shares, and stock appreciation rights; retirement plan services; mutual fund clearing services; and advisor services, including interactive tools and educational content. The Company operates through branch offices. The Charles Schwab Corporation was incorporated in 1971 and is headquartered in Westlake, Texas.