Head to Head Comparison: Pzena Investment Management (NYSE:PZN) versus Morningstar (NASDAQ:MORN)

Pzena Investment Management (NYSE:PZNGet Rating) and Morningstar (NASDAQ:MORNGet Rating) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.

Insider & Institutional Ownership

15.4% of Pzena Investment Management shares are owned by institutional investors. Comparatively, 52.2% of Morningstar shares are owned by institutional investors. 53.2% of Pzena Investment Management shares are owned by company insiders. Comparatively, 41.9% of Morningstar shares are owned 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.

Profitability

This table compares Pzena Investment Management and Morningstar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pzena Investment Management 9.37% 13.29% 8.71%
Morningstar 11.38% 20.18% 10.04%

Analyst Recommendations

This is a summary of recent ratings and price targets for Pzena Investment Management and Morningstar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pzena Investment Management 0 0 0 0 N/A
Morningstar 0 0 0 0 N/A

Dividends

Pzena Investment Management pays an annual dividend of $2.12 per share and has a dividend yield of 28.6%. Morningstar pays an annual dividend of $1.44 per share and has a dividend yield of 0.5%. Pzena Investment Management pays out 212.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Morningstar pays out 32.3% of its earnings in the form of a dividend. Pzena Investment Management has raised its dividend for 1 consecutive years and Morningstar has raised its dividend for 11 consecutive years.

Volatility and Risk

Pzena Investment Management has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Morningstar has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.

Valuation and Earnings

This table compares Pzena Investment Management and Morningstar’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pzena Investment Management $199.33 million 2.75 $18.68 million $1.00 7.42
Morningstar $1.70 billion 6.90 $193.30 million $4.46 61.31

Morningstar has higher revenue and earnings than Pzena Investment Management. Pzena Investment Management is trading at a lower price-to-earnings ratio than Morningstar, indicating that it is currently the more affordable of the two stocks.

Summary

Morningstar beats Pzena Investment Management on 12 of the 14 factors compared between the two stocks.

Pzena Investment Management Company Profile (Get Rating)

Pzena Investment Management, Inc. is a employee owned investment manager. The firm manages equity mutual funds for its clients. It invests in the public equity markets. The firm provides its services to Individuals, high net worth individuals, investment companies, pooled investment vehicles, charitable organizations, pension and profit sharing plans, state or municipal government entities, charitable organizations, other investment advisers, insurance companies, sovereign wealth funds and foreign official institutions, corporations or other businesses. The firm uses a combination of fundamental analysis to make its investments. The firm employs a combination of in-house and external research to make its investments. Pzena Investment Management, Inc. was founded in 1995 and is based in New York City with additional offices in Melbourne, Australia and London, United Kingdom.

Morningstar Company Profile (Get Rating)

Morningstar, Inc. provides independent investment research services in North America, Europe, Australia, and Asia. The company offers web-based tools; investment data, fundamental equity and manager research, private capital markets research, credit and fund rating, and index, as well as environmental, social, and governance (ESG) rating services; and investment offerings, including managed investment products, publicly listed and private companies, fixed income securities, and real-time global market data for financial advisors, asset managers, retirement plan providers and sponsors, and individual and institutional investors. It also provides Morningstar Data, an investment data spanning various databases, including equity fundamentals, managed investments, ESG factors, and market data; Morningstar Direct, an investment-analysis platform; Morningstar Managed Portfolios, an advisor service consisting of model portfolio that offers services for independent financial advisors, as well as offers asset allocation services for asset managers, broker/dealers, and insurance providers; Morningstar Advisor Workstation, a web-based research, financial planning, and proposal generation platform; and Morningstar.com, a website for individual investors. In addition, the company offers Morningstar Enterprise Components; Morningstar Credit Ratings that provides issuance and surveillance services for structured finance products and instruments; corporate credit estimates and operational risk assessment rankings; Morningstar Indexes for creating investment products; Morningstar workplace solutions, such as retirement accounts, fiduciary services, allocation funds, and custom models; and PitchBook Platform, research and analysis workstation for investment and research professionals. Further, its PitchBook provides a mobile application, excel plug-in, data feeds, and data solutions. The company was incorporated in 1984 and is headquartered in Chicago, Illinois.

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