Houlihan Lokey (HLI) vs. The Competition Head to Head Analysis

Houlihan Lokey (NYSE:HLI) is one of 1,746 public companies in the “Capital Markets” industry, but how does it compare to its competitors? We will compare Houlihan Lokey to similar businesses based on the strength of its institutional ownership, profitability, valuation, risk, earnings, dividends and analyst recommendations.

Risk and Volatility

Houlihan Lokey has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Houlihan Lokey’s competitors have a beta of 0.79, meaning that their average share price is 21% less volatile than the S&P 500.

Institutional and Insider Ownership

78.1% of Houlihan Lokey shares are owned by institutional investors. Comparatively, 30.6% of shares of all “Capital Markets” companies are owned by institutional investors. 22.5% of Houlihan Lokey shares are owned by insiders. Comparatively, 13.1% of shares of all “Capital Markets” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Houlihan Lokey and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Houlihan Lokey	0	5	7	0	2.58
Houlihan Lokey Competitors	5605	20212	22567	650	2.37

Houlihan Lokey currently has a consensus price target of $160.44, suggesting a potential upside of 12.07%. As a group, “Capital Markets” companies have a potential upside of 23.73%. Given Houlihan Lokey’s competitors higher probable upside, analysts plainly believe Houlihan Lokey has less favorable growth aspects than its competitors.

Dividends

Houlihan Lokey pays an annual dividend of $2.80 per share and has a dividend yield of 2.0%. Houlihan Lokey pays out 47.0% 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 29.2% of their earnings in the form of a dividend. Houlihan Lokey has raised its dividend for 9 consecutive years. Houlihan Lokey lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation and Earnings

This table compares Houlihan Lokey and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Houlihan Lokey	$2.62 billion	$425.70 million	24.02
Houlihan Lokey Competitors	$2.38 billion	$398.05 million	15.13

Houlihan Lokey has higher revenue and earnings than its competitors. Houlihan Lokey is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Houlihan Lokey and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Houlihan Lokey	15.78%	19.94%	11.51%
Houlihan Lokey Competitors	314.66%	9.82%	3.42%

Summary

Houlihan Lokey beats its competitors on 10 of the 15 factors compared.

Houlihan Lokey Company Profile

Houlihan Lokey, Inc. is a global investment bank headquartered in Los Angeles. Founded in 1972, the firm provides financial advice and related services to corporations, financial sponsors, governments and other organizations. The company’s main businesses include corporate finance, financial restructuring and financial and valuation advisory. Its services include advising on mergers and acquisitions, debt and equity financing, restructuring transactions, and business and asset valuations. Houlihan Lokey serves clients across the Americas, Europe, the Middle East and Asia-Pacific through an international office network.