Critical Survey: PJT Partners (PJT) versus Hennessy Advisors (HNNA)

PJT Partners (NYSE:PJT) and Hennessy Advisors (NASDAQ:HNNA) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Volatility and Risk

PJT Partners has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Hennessy Advisors has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Valuation & Earnings

This table compares PJT Partners and Hennessy Advisors’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PJT Partners $499.28 million 1.94 -$28.32 million $1.54 28.32
Hennessy Advisors $54.59 million 1.61 $20.61 million N/A N/A

Hennessy Advisors has lower revenue, but higher earnings than PJT Partners.

Profitability

This table compares PJT Partners and Hennessy Advisors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PJT Partners -2.98% 19.78% 15.28%
Hennessy Advisors 37.76% 25.31% 16.11%

Dividends

PJT Partners pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Hennessy Advisors pays an annual dividend of $0.44 per share and has a dividend yield of 4.0%. PJT Partners pays out 13.0% of its earnings in the form of a dividend. Hennessy Advisors has raised its dividend for 3 consecutive years. Hennessy Advisors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

60.6% of PJT Partners shares are held by institutional investors. Comparatively, 17.8% of Hennessy Advisors shares are held by institutional investors. 8.0% of PJT Partners shares are held by insiders. Comparatively, 41.6% of Hennessy Advisors shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for PJT Partners and Hennessy Advisors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PJT Partners 0 2 2 0 2.50
Hennessy Advisors 0 0 0 0 N/A

PJT Partners presently has a consensus target price of $57.00, indicating a potential upside of 30.70%. Given PJT Partners’ higher probable upside, analysts clearly believe PJT Partners is more favorable than Hennessy Advisors.

Summary

Hennessy Advisors beats PJT Partners on 8 of the 15 factors compared between the two stocks.

PJT Partners Company Profile

PJT Partners Inc. provides various strategic advisory, restructuring and special situations, and private fund advisory and placement services to corporations, financial sponsors, institutional investors, and governments worldwide. It offers a range of financial advisory and transaction execution capability, including mergers and acquisitions, joint ventures, minority investments, asset swaps, divestitures, takeover defenses, corporate finance advisory, private placements, and distressed sales. The company also advices companies, creditors, and financial sponsors on recapitalizations, reorganizations, exchange offers, debt repurchases, capital raises, and distressed mergers and acquisitions. In addition, it offers private fund advisory and placement services for a range of investment strategies, including private equity, hedge fund, real estate, and secondary advisory. The company was formerly known as Blackstone Advisory Inc. and changed its name to PJT Partners Inc. in March 2015. PJT Partners Inc. was incorporated in 2014 and is headquartered in New York, New York.

Hennessy Advisors Company Profile

Hennessy Advisors, Inc. is publicly owned investment manager. It provides its services to Hennessy Funds and investment companies. The firm launches and manages equity, fixed income, and balanced mutual funds. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth stocks of companies. It conducts in-house research to make its investments. Hennessy Advisors, Inc. was founded in 1989 and is based in Novato, California with additional offices in Boston, Massachusetts and Chapel Hill, North Carolina.

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