Morgan Stanley (MS) and Associated Capital Group (AC) Financial Review

Morgan Stanley (NYSE:MS) and Associated Capital Group (NYSE:AC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Morgan Stanley and Associated Capital Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Morgan Stanley 15.93% 12.51% 1.03%
Associated Capital Group -7.70% -0.22% -0.20%

Institutional & Insider Ownership

84.9% of Morgan Stanley shares are held by institutional investors. Comparatively, 13.3% of Associated Capital Group shares are held by institutional investors. 0.2% of Morgan Stanley shares are held by company insiders. Comparatively, 82.2% of Associated Capital Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Morgan Stanley has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500. Comparatively, Associated Capital Group has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Morgan Stanley and Associated Capital Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morgan Stanley 0 7 11 0 2.61
Associated Capital Group 0 0 0 0 N/A

Morgan Stanley presently has a consensus target price of $59.00, suggesting a potential upside of 32.91%. Given Morgan Stanley’s higher probable upside, research analysts plainly believe Morgan Stanley is more favorable than Associated Capital Group.

Dividends

Morgan Stanley pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Associated Capital Group pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Morgan Stanley pays out 33.3% of its earnings in the form of a dividend. Morgan Stanley has increased its dividend for 4 consecutive years. Morgan Stanley is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Morgan Stanley and Associated Capital Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Morgan Stanley $43.64 billion 1.75 $6.11 billion $3.60 12.33
Associated Capital Group $26.92 million 35.67 $8.83 million N/A N/A

Morgan Stanley has higher revenue and earnings than Associated Capital Group.

Summary

Morgan Stanley beats Associated Capital Group on 11 of the 14 factors compared between the two stocks.

Morgan Stanley Company Profile

Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. The company operates Institutional Securities, Wealth Management, and Investment Management segments. The Institutional Securities segment offers capital raising and financial advisory services, including services related to the underwriting of debt, equity, and other securities, as well as advice on mergers and acquisitions, restructurings, real estate, and project finance. This segment also provides sales and trading services, such as sales, financing, prime brokerage, and market-making services in equity securities and fixed income products consisting of foreign exchange and commodities; corporate loans, commercial and residential mortgage lending, and asset-backed lending; financing for equities and commodities customers, and municipalities; and investment and research services. The Wealth Management segment offers various financial services and solutions covering brokerage and investment advisory services, financial and wealth planning services, annuity and insurance products, credit and other lending products, and banking and retirement plan services to individual investors and small to medium-sized businesses/institutions. The Investment Management segment provides various investment strategies and products comprising equity, fixed income, liquidity, and alternative/other products to defined benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, and third-party fund sponsors and corporations through a network of institutional and intermediary channels. Morgan Stanley was founded in 1924 and is headquartered in New York, New York.

Associated Capital Group Company Profile

Associated Capital Group, Inc. provides investment advisory and asset management services in the United States. It offers alternative investment management, institutional research, and underwriting services. The company was founded in 2015 and is headquartered in Rye, New York.

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