Morningstar (NASDAQ: MORN) and China Finance Online Co. Limited (NASDAQ:JRJC) are both business services companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, profitability and analyst recommendations.

Profitability

This table compares Morningstar and China Finance Online Co. Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Morningstar 19.43% 15.55% 8.52%
China Finance Online Co. Limited -61.81% -43.68% -21.96%

Dividends

Morningstar pays an annual dividend of $0.92 per share and has a dividend yield of 1.1%. China Finance Online Co. Limited does not pay a dividend. Morningstar pays out 24.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for Morningstar and China Finance Online Co. Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morningstar 0 0 0 0 N/A
China Finance Online Co. Limited 0 0 0 0 N/A

Earnings & Valuation

This table compares Morningstar and China Finance Online Co. Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Morningstar $847.00 million 4.10 $228.30 million $3.82 21.37
China Finance Online Co. Limited N/A N/A N/A ($1.49) -1.55

Morningstar has higher revenue and earnings than China Finance Online Co. Limited. China Finance Online Co. Limited is trading at a lower price-to-earnings ratio than Morningstar, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

38.8% of Morningstar shares are held by institutional investors. Comparatively, 6.2% of China Finance Online Co. Limited shares are held by institutional investors. 57.4% of Morningstar shares are held by company insiders. Comparatively, 30.4% of China Finance Online Co. Limited shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Morningstar has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, China Finance Online Co. Limited has a beta of 2.57, meaning that its stock price is 157% more volatile than the S&P 500.

Summary

Morningstar beats China Finance Online Co. Limited on 8 of the 10 factors compared between the two stocks.

About Morningstar

Morningstar, Inc. is a provider of independent investment research in North America, Europe, Australia, and Asia. The Company focuses to create products that help investors reach their financial goals. It offers a range of data, software, research, and investment management offerings for financial advisors, asset managers, sponsors, and individual investors. It provides data and research insights on a range of investment offerings, including managed investment products, listed companies, capital markets, and real-time global market data. It conducts its business operations outside of the United States through subsidiaries in countries, including Australia, Brazil, Canada, Chile, Denmark, France, Germany, India, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, People’s Republic of China (both Hong Kong and the mainland), Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, the United Arab Emirates, and the United Kingdom.

About China Finance Online Co. Limited

China Finance Online Co. Limited is a Web-based financial services company in China. The Company provides Chinese retail investors with online access to securities and commodities trading services, wealth management products, securities investment advisory services, as well as financial database and analytics services to institutional customers. The Company operates through three segments: commodities brokerage services, online financial information and advisory service, and other related services in the People’s Republic of China (PRC), and Hong Kong brokerage services. The Company offers financial software, information services and securities investment advisory services to retail investors in China. Through its subsidiary, Shenzhen Genius Information Technology Co., Ltd., the Company provides financial database and analytics to institutional customers, including domestic financial, research, academic and regulatory institutions.

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