Morgan Stanley (MS) versus GAMCO Investors (GBL) Financial Contrast

Morgan Stanley (NYSE: MS) and GAMCO Investors (NYSE:GBL) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Dividends

Morgan Stanley pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. GAMCO Investors pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Morgan Stanley pays out 27.8% of its earnings in the form of a dividend. Morgan Stanley has increased its dividend for 4 consecutive years and GAMCO Investors has increased its dividend for 6 consecutive years.

Volatility & Risk

Morgan Stanley has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, GAMCO Investors has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.

Institutional & Insider Ownership

85.3% of Morgan Stanley shares are owned by institutional investors. Comparatively, 17.4% of GAMCO Investors shares are owned by institutional investors. 0.2% of Morgan Stanley shares are owned by insiders. Comparatively, 81.0% of GAMCO Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Morgan Stanley and GAMCO Investors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morgan Stanley 2 6 12 1 2.57
GAMCO Investors 0 0 0 0 N/A

Morgan Stanley currently has a consensus target price of $56.06, indicating a potential upside of 3.12%. Given Morgan Stanley’s higher probable upside, research analysts clearly believe Morgan Stanley is more favorable than GAMCO Investors.

Earnings and Valuation

This table compares Morgan Stanley and GAMCO Investors’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Morgan Stanley $43.64 billion 2.21 $6.11 billion $3.60 15.10
GAMCO Investors $360.52 million 2.23 $77.80 million N/A N/A

Morgan Stanley has higher revenue and earnings than GAMCO Investors.

Profitability

This table compares Morgan Stanley and GAMCO Investors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Morgan Stanley 15.09% 11.10% 0.93%
GAMCO Investors 22.16% -94.36% 55.78%

Summary

Morgan Stanley beats GAMCO Investors on 10 of the 16 factors compared between the two stocks.

About Morgan Stanley

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 through three segments: Institutional Securities, Wealth Management, and Investment Management. 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, and market-making services in equity securities and fixed income products consisting of foreign exchange and commodities, as well as prime brokerage services; corporate loans, commercial and residential mortgage lending, and asset-backed lending; financing for equities and commodities customers; loans to 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.

About GAMCO Investors

GAMCO Investors, Inc. is a publicly owned holding investment manager. The firm also provides wealth management, investment advisory, institutional research, brokerage, dealer, underwriting, and distribution services to its clients. It provides its services to individuals including high net worth individuals, corporate pension and profit-sharing plans, foundations, endowments, jointly trust plans, municipalities, and investment companies. The firm, through its subsidiaries, manages separate client-focused equity, fixed income, and balanced portfolios. It also launches equity, fixed income, and balanced mutual funds and manages equity mutual funds for its clients. Through its subsidiaries, the firm invests in the public equity and fixed income markets across the globe. It invests in value stocks of companies. The firm employs fundamental analysis with a focus on bottom-up stock picking approach to create its portfolios. It conducts in-house research to make its investments. The firm was founded in 1976 and is based in Rye, New York with additional offices in Greenwich, Connecticut; Bannockburn, Illinois; and Tokyo, Japan. GAMCO Investors, Inc. operates as a subsidiary of GGCP, Inc.

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