Critical Contrast: Diamond Hill Investment Group (NASDAQ:DHIL) & Moelis & Co (NASDAQ:MC)

Diamond Hill Investment Group (NASDAQ:DHIL) and Moelis & Co (NYSE:MC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Earnings and Valuation

This table compares Diamond Hill Investment Group and Moelis & Co’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diamond Hill Investment Group $145.63 million 3.17 $47.38 million N/A N/A
Moelis & Co $885.84 million 2.22 $140.68 million $3.00 10.99

Moelis & Co has higher revenue and earnings than Diamond Hill Investment Group.

Dividends

Moelis & Co pays an annual dividend of $2.00 per share and has a dividend yield of 6.1%. Diamond Hill Investment Group does not pay a dividend. Moelis & Co pays out 66.7% of its earnings in the form of a dividend.

Profitability

This table compares Diamond Hill Investment Group and Moelis & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diamond Hill Investment Group 34.29% 18.66% 12.99%
Moelis & Co 16.14% 47.82% 20.50%

Risk & Volatility

Diamond Hill Investment Group has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500. Comparatively, Moelis & Co has a beta of 2, meaning that its stock price is 100% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Diamond Hill Investment Group and Moelis & Co, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diamond Hill Investment Group 0 0 0 0 N/A
Moelis & Co 1 2 3 0 2.33

Moelis & Co has a consensus price target of $42.40, suggesting a potential upside of 28.64%. Given Moelis & Co’s higher probable upside, analysts plainly believe Moelis & Co is more favorable than Diamond Hill Investment Group.

Insider and Institutional Ownership

54.9% of Diamond Hill Investment Group shares are owned by institutional investors. Comparatively, 73.9% of Moelis & Co shares are owned by institutional investors. 6.3% of Diamond Hill Investment Group shares are owned by company insiders. Comparatively, 19.7% of Moelis & Co shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Moelis & Co beats Diamond Hill Investment Group on 10 of the 14 factors compared between the two stocks.

About Diamond Hill Investment Group

Diamond Hill Investment Group, Inc., together with its subsidiaries, provides investment advisory and fund administration services in the United States. It sponsors, distributes, and offers investment advisory and related services to a range of clients, such as corporations, mutual funds, retirement plans, public pension funds, endowments, foundations, financial institutions, and high net worth individuals. The company also provides fund administration services, including portfolio and regulatory compliance, treasury and financial oversight, and general business management and governance of the mutual fund complex, as well as oversight of back-office service providers, such as the custodian, fund accountant, and transfer agent. It offers investment advisory services to third-party financial intermediaries comprising independent registered investment advisors, brokers, financial planners, and wealth advisers; and fund administration services primarily to mutual funds, institutional accounts, and private investment funds. The company was founded in 1990 and is based in Columbus, Ohio.

About Moelis & Co

Moelis & Company, an investment bank, provides strategic and financial advisory services in the United States and internationally. It advises clients in the areas of mergers and acquisitions, recapitalizations and restructurings, capital markets advisory, and other corporate finance matters. The company offers its services to public multinational corporations, governments, financial sponsors, middle market private companies, and individual entrepreneurs. It has strategic alliances with Sumitomo Mitsui Banking Corporation and SMBC Nikko Securities Inc.; and Alfaro, Dávila y Scherer, S.C. Moelis & Company was founded in 2007 and is headquartered in New York, New York.

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