Safeguard Scientifics (NYSE: SFE) and BlackRock (NYSE:BLK) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Profitability

This table compares Safeguard Scientifics and BlackRock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safeguard Scientifics N/A -61.90% -42.77%
BlackRock 29.92% 11.74% 1.53%

Insider and Institutional Ownership

77.6% of Safeguard Scientifics shares are owned by institutional investors. Comparatively, 82.5% of BlackRock shares are owned by institutional investors. 2.7% of Safeguard Scientifics shares are owned by company insiders. Comparatively, 1.9% of BlackRock shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Safeguard Scientifics and BlackRock’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Safeguard Scientifics N/A N/A -$17.72 million ($4.76) -2.84
BlackRock $11.52 billion 6.54 $5.06 billion $20.84 22.29

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Safeguard Scientifics and BlackRock, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safeguard Scientifics 0 0 0 0 N/A
BlackRock 0 3 9 0 2.75

BlackRock has a consensus target price of $459.09, indicating a potential downside of 1.15%. Given BlackRock’s higher probable upside, analysts plainly believe BlackRock is more favorable than Safeguard Scientifics.

Dividends

BlackRock pays an annual dividend of $10.00 per share and has a dividend yield of 2.2%. Safeguard Scientifics does not pay a dividend. BlackRock pays out 48.0% of its earnings in the form of a dividend. BlackRock has raised its dividend for 7 consecutive years.

Risk and Volatility

Safeguard Scientifics has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500. Comparatively, BlackRock has a beta of 1.72, indicating that its stock price is 72% more volatile than the S&P 500.

Summary

BlackRock beats Safeguard Scientifics on 12 of the 14 factors compared between the two stocks.

Safeguard Scientifics Company Profile

Safeguard Scientifics, Inc. is engaged in providing capital to technology companies within the fields of healthcare, financial services and digital media. The Company holds interest in companies, which it refers to as partner companies. As of December 31, 2016, the Company held interests in 29 non-consolidated partner companies. The Company offers operational and management support to each of its partner companies. In addition to management and operational support, the Company offers ongoing planning and development assessment. It provides mentoring, advice and guidance to develop partner company management. The Company serves on the boards of directors of its partner companies, working with them to develop and implement strategic and operating plans. It measures and monitors achievement of these plans through regular review of operational and financial performance measurements.

BlackRock Company Profile

BlackRock, Inc. (BlackRock) is an investment management company. BlackRock provides a range of investment and risk management services to institutional and retail clients worldwide. Its diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Its product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Its products are offered directly and through intermediaries in a range of vehicles, including open-end and closed-end mutual funds, iShares exchange-traded funds (ETFs), separate accounts, collective investment funds and other pooled investment vehicles. It offers its Aladdin investment system, as well as risk management, outsourcing, advisory and technology services, to institutional investors and wealth management intermediaries under the BlackRock Solutions name.

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