Greenhill & Co. (NYSE: GHL) and Moelis & (NYSE:MC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, analyst recommendations, profitability, risk and earnings.
Earnings and Valuation
This table compares Greenhill & Co. and Moelis &’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Greenhill & Co.||$299.08 million||1.69||$39.42 million||$1.33||12.86|
|Moelis &||$700.69 million||1.66||$55.04 million||$2.00||21.10|
Moelis & has higher revenue and earnings than Greenhill & Co.. Greenhill & Co. is trading at a lower price-to-earnings ratio than Moelis &, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and target prices for Greenhill & Co. and Moelis &, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Greenhill & Co.||5||3||0||0||1.38|
Greenhill & Co. presently has a consensus target price of $19.50, suggesting a potential upside of 14.04%. Moelis & has a consensus target price of $37.57, suggesting a potential downside of 10.97%. Given Greenhill & Co.’s higher possible upside, research analysts clearly believe Greenhill & Co. is more favorable than Moelis &.
Greenhill & Co. pays an annual dividend of $1.80 per share and has a dividend yield of 10.5%. Moelis & pays an annual dividend of $1.48 per share and has a dividend yield of 3.5%. Greenhill & Co. pays out 135.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Moelis & pays out 74.0% of its earnings in the form of a dividend. Greenhill & Co. has raised its dividend for 2 consecutive years. Greenhill & Co. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
97.1% of Greenhill & Co. shares are owned by institutional investors. Comparatively, 90.8% of Moelis & shares are owned by institutional investors. 8.3% of Greenhill & Co. shares are owned by insiders. Comparatively, 52.6% of Moelis & shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Greenhill & Co. has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Moelis & has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500.
This table compares Greenhill & Co. and Moelis &’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Greenhill & Co.||13.98%||15.68%||10.43%|
Moelis & beats Greenhill & Co. on 11 of the 17 factors compared between the two stocks.
About Greenhill & Co.
Greenhill & Co., Inc. is an investment bank. The Company provides financial and strategic advice on domestic and cross-border mergers and acquisitions, divestitures, restructurings, financings, capital raising and other transactions to a diverse client base, including corporations, partnerships, institutions and governments globally. The Company also provides advice in connection with defense preparedness, activist response strategies and other mission critical situations. The Company acts for clients located across the world from its offices located in the United States, Australia, Brazil, Canada, Germany, Hong Kong, Japan, Sweden, and the United Kingdom. The Company’s subsidiaries provide advisory services in various jurisdictions. Its operating entities include Greenhill & Co., LLC (G&Co), Greenhill & Co. International LLP (GCI), Greenhill & Co. Europe LLP (GCE), Greenhill & Co. Australia Pty Limited (Greenhill Australia) and Greenhill Cogent, LP (GC LP).
About Moelis &
Moelis & Company is an investment banking advisory company. The Company provides strategic and financial advice to a client base, including corporations, governments and financial sponsors. The Company offers financial advisory services across various industry sectors. It advices its clients on decisions, including mergers and acquisitions (M&A), recapitalizations and restructurings, and other corporate finance matters. With 17 offices located in North and South America, Europe, the Middle East, Asia and Australia, the Company provided information flow and cross-border solutions as of December 31, 2016. The Company offers advisory services in all industries, including consumer, retail and restaurants; energy, power and infrastructure; financial institutions; financial sponsors; general industrials; healthcare; real estate, gaming, lodging and leisure, and technology, media and telecommunications. It advises clients on all aspects of public and private debt and equity transactions.
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