Contrasting Hamilton Lane (NASDAQ:HLNE) and MSCI (NYSE:MSCI)

MSCI (NYSE:MSCI) and Hamilton Lane (NASDAQ:HLNE) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Insider & Institutional Ownership

90.0% of MSCI shares are held by institutional investors. Comparatively, 97.4% of Hamilton Lane shares are held by institutional investors. 3.8% of MSCI shares are held by company insiders. Comparatively, 22.2% of Hamilton Lane shares are held 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 MSCI and Hamilton Lane’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSCI	38.36%	-82.59%	24.29%
Hamilton Lane	30.59%	27.82%	16.02%

Risk & Volatility

MSCI has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Hamilton Lane has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for MSCI and Hamilton Lane, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSCI	0	3	7	1	2.82
Hamilton Lane	0	5	5	0	2.50

MSCI presently has a consensus price target of $665.89, indicating a potential upside of 18.84%. Hamilton Lane has a consensus price target of $157.63, indicating a potential upside of 49.95%. Given Hamilton Lane’s higher probable upside, analysts clearly believe Hamilton Lane is more favorable than MSCI.

Dividends

MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.5%. Hamilton Lane pays an annual dividend of $2.16 per share and has a dividend yield of 2.1%. MSCI pays out 52.3% of its earnings in the form of a dividend. Hamilton Lane pays out 38.8% 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. MSCI has raised its dividend for 11 consecutive years and Hamilton Lane has raised its dividend for 8 consecutive years. Hamilton Lane is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares MSCI and Hamilton Lane”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSCI	$3.13 billion	13.13	$1.20 billion	$15.69	35.71
Hamilton Lane	$712.96 million	8.22	$217.42 million	$5.57	18.87

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

Summary

MSCI beats Hamilton Lane on 11 of the 18 factors compared between the two stocks.

About MSCI

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.

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.