Hennessy Advisors (NASDAQ:HNNA) vs. Cannae (NYSE:CNNE) Financial Comparison

Hennessy Advisors (NASDAQ:HNNA) and Cannae (NYSE:CNNE) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations.

Earnings & Valuation

This table compares Hennessy Advisors and Cannae”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hennessy Advisors	$35.82 million	2.16	$7.10 million	$1.25	7.94
Cannae	$452.50 million	1.92	-$304.60 million	($6.70)	-2.59

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

Profitability

This table compares Hennessy Advisors and Cannae’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hennessy Advisors	27.55%	10.48%	6.38%
Cannae	-94.12%	-18.19%	-14.58%

Volatility and Risk

Hennessy Advisors has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Cannae has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Dividends

Hennessy Advisors pays an annual dividend of $0.55 per share and has a dividend yield of 5.5%. Cannae pays an annual dividend of $0.60 per share and has a dividend yield of 3.5%. Hennessy Advisors pays out 44.0% of its earnings in the form of a dividend. Cannae pays out -9.0% 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Hennessy Advisors and Cannae, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hennessy Advisors	0	0	1	0	3.00
Cannae	1	1	2	0	2.25

Cannae has a consensus price target of $24.00, indicating a potential upside of 38.26%. Given Cannae’s higher possible upside, analysts plainly believe Cannae is more favorable than Hennessy Advisors.

Institutional and Insider Ownership

10.3% of Hennessy Advisors shares are owned by institutional investors. Comparatively, 88.1% of Cannae shares are owned by institutional investors. 37.4% of Hennessy Advisors shares are owned by company insiders. Comparatively, 10.9% of Cannae shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Hennessy Advisors beats Cannae on 10 of the 16 factors compared between the two stocks.

About Hennessy Advisors

Hennessy Advisors, Inc. is an employee owned investment manager. It provides its services to Hennessy Funds and investment companies. The firm launches and manages equity, fixed income, and balanced mutual funds. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth stocks of companies. It conducts in-house research to make its investments. Hennessy Advisors, Inc. was founded in 1989 and is based in Novato, California with additional offices in Boston, Massachusetts and Chapel Hill, North Carolina.

About Cannae

Cannae Holdings, Inc. is a principal investment firm. The firm primarily invests in restaurants, technology enabled healthcare services, financial services and more. It takes both minority and majority stakes. Cannae Holdings, Inc. was founded in 2014 and is based in Las Vegas, Nevada.