Contrasting Blackstone (NYSE:BX) & Heritage Global (NASDAQ:HGBL)

Heritage Global (NASDAQ:HGBL) and Blackstone (NYSE:BX) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

33.5% of Heritage Global shares are owned by institutional investors. Comparatively, 70.0% of Blackstone shares are owned by institutional investors. 14.0% of Heritage Global shares are owned by insiders. Comparatively, 1.0% of Blackstone shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Heritage Global and Blackstone, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heritage Global	1	1	1	1	2.50
Blackstone	0	11	11	0	2.50

Heritage Global presently has a consensus target price of $4.00, suggesting a potential upside of 200.75%. Blackstone has a consensus target price of $174.77, suggesting a potential upside of 34.72%. Given Heritage Global’s higher possible upside, analysts plainly believe Heritage Global is more favorable than Blackstone.

Profitability

This table compares Heritage Global and Blackstone’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heritage Global	6.18%	4.69%	3.60%
Blackstone	20.89%	22.17%	9.41%

Volatility & Risk

Heritage Global has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Blackstone has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500.

Earnings & Valuation

This table compares Heritage Global and Blackstone”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heritage Global	$45.36 million	1.02	$5.18 million	$0.09	14.78
Blackstone	$14.45 billion	6.63	$3.02 billion	$3.88	33.44

Blackstone has higher revenue and earnings than Heritage Global. Heritage Global is trading at a lower price-to-earnings ratio than Blackstone, indicating that it is currently the more affordable of the two stocks.

Summary

Blackstone beats Heritage Global on 11 of the 14 factors compared between the two stocks.

About Heritage Global

Heritage Global Inc., together with its subsidiaries, operates as an asset services company with focus on financial and industrial asset transactions. The company operates in three segments: Auction and Liquidation, Refurbishment & Resale, and Brokerage. It provides a suite of market making, acquisitions, refurbishment, dispositions, valuations, and secured lending services. The company focuses on identifying, valuing, acquiring, and monetizing underlying tangible assets. It acts as an adviser, as well as a principal, acquiring, or brokering manufacturing facilities; surplus industrial machinery and equipment; industrial inventories; and charged-off receivable portfolios. The company was formerly known as Counsel RB Capital Inc. and changed its name to Heritage Global, Inc. in August 2013. Heritage Global, Inc. was founded in 1937 and is headquartered in San Diego, California.

About Blackstone

Blackstone Inc. is an alternative asset management firm specializing in real estate, private equity, hedge fund solutions, credit, secondary funds of funds, public debt and equity and multi-asset class strategies. The firm typically invests in early-stage companies. It also provide capital markets services. The real estate segment specializes in opportunistic, core+ investments as well as debt investment opportunities collateralized by commercial real estate, and stabilized income-oriented commercial real estate across North America, Europe and Asia. The firm's corporate private equity business pursues transactions throughout the world across a variety of transaction types, including large buyouts,special situations, distressed mortgage loans, mid-cap buyouts, buy and build platforms, which involves multiple acquisitions behind a single management team and platform, and growth equity/development projects involving significant majority stakes in portfolio companies and minority investments in operating companies, shipping, real estate, corporate or consumer loans, and alternative energy greenfield development projects in energy and power, property, dislocated markets, shipping opportunities, financial institution breakups, re-insurance, and improving freight mobility, financial services, healthcare, life sciences, infrastructure, enterprise tech and consumer, as well as consumer technologies. The firm considers investment in Asia and Latin America. It seeks to invest between $0.25 million and $900 million per transaction. It invests in companies with enterprise value between $500 million and $5000 million. It has a three year investment period. Its hedge fund business manages a broad range of commingled and customized fund solutions and its credit business focuses on loans, and securities of non-investment grade companies spread across the capital structure including senior debt, subordinated debt, preferred stock and common equity. Blackstone Inc. was founded in 1985 and is headquartered in New York, New York with additional offices across Asia, Europe, North America and Central America.