Head to Head Contrast: Morningstar (MORN) & AllianceBernstein (AB)

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AllianceBernstein (NYSE:AB) and Morningstar (NASDAQ:MORN) are both mid-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Dividends

AllianceBernstein pays an annual dividend of $2.56 per share and has a dividend yield of 8.5%. Morningstar pays an annual dividend of $1.12 per share and has a dividend yield of 0.8%. AllianceBernstein pays out 95.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AllianceBernstein has raised its dividend for 2 consecutive years and Morningstar has raised its dividend for 7 consecutive years.

Valuation and Earnings

This table compares AllianceBernstein and Morningstar’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AllianceBernstein $3.37 billion 0.86 $242.39 million $2.67 11.22
Morningstar $1.02 billion 5.64 $183.00 million N/A N/A

AllianceBernstein has higher revenue and earnings than Morningstar.

Insider & Institutional Ownership

17.9% of AllianceBernstein shares are held by institutional investors. Comparatively, 42.3% of Morningstar shares are held by institutional investors. 2.7% of AllianceBernstein shares are held by company insiders. Comparatively, 57.5% of Morningstar shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares AllianceBernstein and Morningstar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AllianceBernstein 7.21% 17.10% 17.09%
Morningstar 17.94% 18.22% 11.37%

Analyst Ratings

This is a summary of recent ratings and price targets for AllianceBernstein and Morningstar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AllianceBernstein 0 0 1 0 3.00
Morningstar 0 0 0 0 N/A

AllianceBernstein presently has a consensus target price of $34.00, suggesting a potential upside of 13.48%. Given AllianceBernstein’s higher possible upside, equities research analysts clearly believe AllianceBernstein is more favorable than Morningstar.

Volatility & Risk

AllianceBernstein has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Morningstar has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Summary

Morningstar beats AllianceBernstein on 8 of the 15 factors compared between the two stocks.

AllianceBernstein Company Profile

AllianceBernstein Holding L.P. is publicly owned investment manager. The firm also provides research services to its clients. It provides its services to investment companies, pension and profit sharing plans, banks and thrift institutions, trusts, estates, government agencies, charitable organizations, individuals, corporations, and other business entities. The firm invests in public equity, fixed income, and alternative investment markets across the globe. It employs long/short strategy to make its investments. The firm conducts in-house research to make its investments. AllianceBernstein Holding L.P. was founded in 1987 and is based in New York, New York.

Morningstar Company Profile

Morningstar, Inc. provides independent investment research services in North America, Europe, Australia, and Asia. It offers a line of data, research, and software tools on a range of investment offerings, including managed investment products, publicly listed companies, fixed income securities, private capital markets, and real-time global market data for financial advisors, asset managers, retirement plan providers and sponsors, and individual and institutional investors. The company offers Morningstar Data, an investment data spanning various investment databases, including pricing and commodity data; Morningstar Direct, an institutional investment research platform; investment management solutions, which include Morningstar Managed Portfolios, the strategist models on third-party managed account platforms, as well as services for institutional asset management, asset allocation, and manager selection; institutional asset management services for asset management firms, broker-dealers, and insurance providers; Morningstar Advisor Workstation, a Web-based investment planning system; and Morningstar.com, a Website for individual investors. It also provides Morningstar Enterprise Components, a set of tools and capabilities that builds customized Websites or enhances existing solutions; Morningstar Research, which includes equity research and manager research; Morningstar Credit Ratings that provides new issue and surveillance ratings and analysis for structured credits, as well as operational risk assessment services; Morningstar Indexes, a set of investment indexes; workplace solutions, such as retirement advice and managed accounts, fiduciary services, and custom models; a mobile application, excel plug-in, data feeds, and data solutions; equity and manager research, and credit rating services; and institutional asset management, asset allocation, and manager selection services. The company was founded in 1984 and is headquartered in Chicago, Illinois.

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