3i Group (OTCMKTS:TGOPY) & Moody’s (NYSE:MCO) Critical Contrast

Moody’s (NYSE:MCO) and 3i Group (OTCMKTS:TGOPY) are both large-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Dividends

Moody’s pays an annual dividend of $4.12 per share and has a dividend yield of 0.9%. 3i Group pays an annual dividend of $0.19 per share and has a dividend yield of 2.1%. Moody’s pays out 30.1% of its earnings in the form of a dividend. Moody’s has raised its dividend for 16 consecutive years.

Risk and Volatility

Moody’s has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, 3i Group has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.

Insider & Institutional Ownership

92.1% of Moody’s shares are held by institutional investors. 0.1% of Moody’s shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Moody’s and 3i Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Moody’s	0	5	12	1	2.78
3i Group	2	0	4	0	2.33

Moody’s currently has a consensus target price of $550.25, suggesting a potential upside of 24.81%. Given Moody’s’ stronger consensus rating and higher possible upside, equities analysts plainly believe Moody’s is more favorable than 3i Group.

Profitability

This table compares Moody’s and 3i Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Moody’s	31.86%	66.01%	17.38%
3i Group	N/A	N/A	N/A

Earnings & Valuation

This table compares Moody’s and 3i Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Moody’s	$7.72 billion	10.17	$2.46 billion	$13.68	32.23
3i Group	$6.37 billion	5.73	N/A	N/A	N/A

Moody’s has higher revenue and earnings than 3i Group.

Summary

Moody’s beats 3i Group on 13 of the 15 factors compared between the two stocks.

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.

About 3i Group

3i Group plc is a private equity firm specializing in mature companies, growth capital, middle markets, infrastructure, and management leveraged buyouts and buy-ins. The firm also provides infrastructure financing and debt management. For debt management, it invests in senior and mezzanine corporate debt in typically large and private companies in United Kingdom, Europe, Asia, and North America. It makes private equity investments in business and technology services, financial services, consumer, healthcare, consumption and distribution, media and telecom, renewable energy, wind, and industrial technology sector. Within business and technology services, the firm seeks to invest in sub sectors such as testing, inspection and certification; intelligent outsourcing, BPO and consultancy; human capital including staffing, governance, risk and compliance, services to pharmaceutical companies, vertical application software, education and training businesses; facilities management; support services to industrial sectors such as oil and gas and utilities; human resources outsourcing and advising; recruitment; logistics and infrastructure support services including distribution, waste, and rental. In the consumer sector, it focuses on, multi-unit roll out, omni-channel propositions, niche branded consumer goods, polarization, health and wellness, ageing population, millennials, consumer goods; e-commerce; retail; food and drinks; and leisure. In the healthcare sector, the firm focuses on outsourced medical device manufacturing & services, outsourced pharmaceutical manufacturing & services, bioprocessing supply chain, life science tools and diagnostics, wellness & consumer health products, pharmaceuticals and biotechnology including specialty pharma, generics / OTC, drug delivery, and animal health; healthcare Services including activities such as elderly and specialty care, including caring for people in their own homes, in hospital and in community facilities, as well as operational services such as outsourced support, clinical services and B2B contract services; medical devices and technology including devices, medical equipment and consumables, diagnostics, and healthcare IT. In the industrial sector, it focuses on automotive, chemicals, safety and security, construction, building products and materials, energy, electronics and electrical components, flow control and filtration, mobility, packaging, industrial Services incl. industrial software, oil, gas, and power. Through 3i BIFM Limited and 3i Infrastructure plc the firm makes infrastructure investments where it focuses principally on the utilities including energy transmission and storage, electricity and gas distribution, water, power generation, and communication network; transportation including airports, ports, ferries, toll roads, and rail; and social infrastructure sector including primary and secondary PFI, public private partnerships, healthcare, education, and government accommodation. In infrastructure it invests primarily in utilities, transportation and social infrastructure in the United Kingdom, France, Italy, Europe, and Ireland. The firm prefers to invest in companies across Europe, France, United States, South America, and Asia. It seeks to make new investments in Northern Europe and North America. The firm typically invests between 5 million ($5.59125 million) and 300 million ($335.475 million) in companies with an enterprise value typically between 100 million ($111.825 million) and 500 million ($559.125 million) and sales value between 80 million ($89.46 million) and 1500 million ($1677.38 million). It seeks to take either majority or minority stakes. It seeks to take a board seat in its portfolio companies with regards to infrastructure investments. The firm invests through a combination of third-party and proprietary capital. It invests through its personal capital. 3i Group plc was founded in 1945 and is based in London, United Kingdom with additional offices across Europe, North America, and Asia.