Invesco (NYSE:IVZ) vs. MSCI (NYSE:MSCI) Head-To-Head Comparison

Invesco (NYSE:IVZ) and MSCI (NYSE:MSCI) are both large-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, analyst recommendations, valuation, institutional ownership and profitability.

Risk and Volatility

Invesco has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, MSCI has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500.

Valuation & Earnings

This table compares Invesco and MSCI”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Invesco	$6.38 billion	1.90	$774.80 million	($1.60)	-17.04
MSCI	$3.13 billion	14.59	$1.11 billion	$15.69	38.80

MSCI has lower revenue, but higher earnings than Invesco. Invesco is trading at a lower price-to-earnings ratio than MSCI, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Invesco and MSCI, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Invesco	0	10	5	1	2.44
MSCI	0	3	8	0	2.73

Invesco presently has a consensus target price of $27.93, indicating a potential upside of 2.45%. MSCI has a consensus target price of $659.00, indicating a potential upside of 8.26%. Given MSCI’s stronger consensus rating and higher probable upside, analysts plainly believe MSCI is more favorable than Invesco.

Insider & Institutional Ownership

66.1% of Invesco shares are held by institutional investors. Comparatively, 90.0% of MSCI shares are held by institutional investors. 1.2% of Invesco shares are held by company insiders. Comparatively, 3.3% of MSCI shares are held 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.

Profitability

This table compares Invesco and MSCI’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Invesco	-6.92%	9.69%	4.09%
MSCI	38.36%	-82.59%	24.29%

Dividends

Invesco pays an annual dividend of $0.84 per share and has a dividend yield of 3.1%. MSCI pays an annual dividend of $7.20 per share and has a dividend yield of 1.2%. Invesco pays out -52.5% of its earnings in the form of a dividend. MSCI pays out 45.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Invesco has increased its dividend for 5 consecutive years and MSCI has increased its dividend for 11 consecutive years. Invesco is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

MSCI beats Invesco on 12 of the 18 factors compared between the two stocks.

About Invesco

Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

About MSCI

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.