Morningstar (NASDAQ: MORN) and Virtus Investment Partners (NASDAQ:VRTS) are both business services companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Profitability

This table compares Morningstar and Virtus Investment Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Morningstar 17.00% 16.54% 9.39%
Virtus Investment Partners 9.96% 15.49% 3.01%

Volatility & Risk

Morningstar has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Virtus Investment Partners has a beta of 1.66, suggesting that its share price is 66% more volatile than the S&P 500.

Institutional & Insider Ownership

40.9% of Morningstar shares are owned by institutional investors. Comparatively, 95.2% of Virtus Investment Partners shares are owned by institutional investors. 57.5% of Morningstar shares are owned by company insiders. Comparatively, 4.8% of Virtus Investment Partners shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Morningstar pays an annual dividend of $1.00 per share and has a dividend yield of 0.9%. Virtus Investment Partners pays an annual dividend of $1.80 per share and has a dividend yield of 1.4%. Virtus Investment Partners pays out 23.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Morningstar and Virtus Investment Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morningstar 0 0 0 0 N/A
Virtus Investment Partners 0 6 1 0 2.14

Virtus Investment Partners has a consensus price target of $136.86, suggesting a potential upside of 7.72%. Given Virtus Investment Partners’ higher probable upside, analysts plainly believe Virtus Investment Partners is more favorable than Morningstar.

Valuation & Earnings

This table compares Morningstar and Virtus Investment Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Morningstar $911.70 million 5.32 $136.90 million N/A N/A
Virtus Investment Partners $425.61 million 2.16 $37.01 million $7.68 16.54

Morningstar has higher revenue and earnings than Virtus Investment Partners.

Summary

Morningstar beats Virtus Investment Partners on 9 of the 14 factors compared between the two stocks.

Morningstar Company Profile

Morningstar, Inc. provides independent investment research services in North America, Europe, Australia, and Asia. It offers a line of data, research, and software tools on a range of investment offerings, including managed investment products, publicly listed companies, fixed income securities, private capital markets, and real-time global market data for financial advisors, asset managers, retirement plan providers and sponsors, and individual and institutional investors. The company offers Morningstar Data, an investment data spanning various investment databases, including pricing and commodity data; Morningstar Direct, an institutional investment research platform; investment management solutions, which include Morningstar Managed Portfolios, the strategist models on third-party managed account platforms, as well as services for institutional asset management, asset allocation, and manager selection; institutional asset management services for asset management firms, broker-dealers, and insurance providers; Morningstar Advisor Workstation, a Web-based investment planning system; and Morningstar.com, a Website for individual investors. It also provides Morningstar Enterprise Components, a set of tools and capabilities that builds customized Websites or enhances existing solutions; Morningstar Research, which includes equity research and manager research; Morningstar Credit Ratings that provides new issue and surveillance ratings and analysis for structured credits, as well as operational risk assessment services; Morningstar Indexes, a set of investment indexes; workplace solutions, such as retirement advice and managed accounts, fiduciary services, and custom models; a mobile application, excel plug-in, data feeds, and data solutions; equity and manager research, and credit rating services; and institutional asset management, asset allocation, and manager selection services. The company was founded in 1984 and is headquartered in Chicago, Illinois.

Virtus Investment Partners Company Profile

Virtus Investment Partners, Inc. is a publicly owned investment manager. The firm primarily provides its services to individual and institutional clients. It launches separate client focused equity and fixed income portfolios. The firm launches equity, fixed income, and balanced mutual funds for its clients. It invests in the public equity, fixed income, and real estate markets. The firm also invests in exchange traded funds. It employs a multi manager approach for its products. The firm employs quantitative analysis to make its investments. It benchmarks the performance of its portfolios against the S&P 500 Index. The firm conducts in-house research to make its investments. Virtus Investment Partners, Inc. was founded in 1988 and is based in Hartford, Connecticut.

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