Reviewing China Finance Online (JRJC) and Morgan Stanley (MS)

China Finance Online (NASDAQ: JRJC) and Morgan Stanley (NYSE:MS) are both computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Risk & Volatility

China Finance Online has a beta of 1.96, meaning that its stock price is 96% more volatile than the S&P 500. Comparatively, Morgan Stanley has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Profitability

This table compares China Finance Online and Morgan Stanley’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Finance Online -64.12% -57.44% -25.81%
Morgan Stanley 15.84% 12.04% 1.00%

Insider and Institutional Ownership

2.5% of China Finance Online shares are held by institutional investors. Comparatively, 85.0% of Morgan Stanley shares are held by institutional investors. 30.4% of China Finance Online shares are held by insiders. Comparatively, 0.2% of Morgan Stanley shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares China Finance Online and Morgan Stanley’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Finance Online $42.62 million 1.09 -$36.73 million N/A N/A
Morgan Stanley $43.64 billion 1.93 $6.11 billion $3.60 13.44

Morgan Stanley has higher revenue and earnings than China Finance Online.

Analyst Ratings

This is a breakdown of current recommendations and price targets for China Finance Online and Morgan Stanley, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Finance Online 0 0 0 0 N/A
Morgan Stanley 1 9 9 1 2.50

Morgan Stanley has a consensus target price of $57.33, suggesting a potential upside of 18.48%. Given Morgan Stanley’s higher probable upside, analysts clearly believe Morgan Stanley is more favorable than China Finance Online.

Dividends

Morgan Stanley pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. China Finance Online does not pay a dividend. 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.

Summary

Morgan Stanley beats China Finance Online on 12 of the 15 factors compared between the two stocks.

China Finance Online Company Profile

China Finance Online Co. Limited provides Web-based financial services in the People's Republic of China and Hong Kong. The company operates through three segments: Commodities Brokerage Services; Online Financial Information and Advisory Service, and Other Related Services; and Hong Kong Brokerage Services. It provides online access to securities and commodities trading services, wealth management products, and securities investment advisory services to retail investors; and financial database and analytics to institutional investors, including financial, research, academic, and regulatory institutions, as well as financial software products. The company is involved in the operation of Yinglibao, an Internet-based financial platform that integrates wealth management solutions and mutual fund distribution; JRJ mobile app for financial information, securities trading, investment advisory, and wealth management; jrj.com.cn to provide access for wealth management solutions and mutual fund distribution; and jrj.com, a financial information Website. In addition, it provides commodities brokerage services; securities and futures contracts brokerage and related services to its customers, who invest in stocks listed on Hong Kong Stock Exchanges and Clearing Limited; information services; and insurance brokerage services. The company offers its products and services to individual investors managing their own money; professional investors, such as institutional investors managing large sums of money on behalf of their clients and high net worth individuals; and other financial professionals, including investment bankers, stock analysts and financial reporters, and middle class individuals. The company was incorporated in 1998 and is based in Beijing, the People's Republic of China.

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 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.

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