Equifax (EFX) and Morningstar (MORN) Head to Head Analysis
Equifax (NYSE: EFX) and Morningstar (NASDAQ:MORN) are both mid-cap business services companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.
This is a breakdown of recent ratings for Equifax and Morningstar, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Equifax presently has a consensus price target of $146.60, suggesting a potential upside of 4.19%. Given Equifax’s higher possible upside, analysts clearly believe Equifax is more favorable than Morningstar.
Equifax pays an annual dividend of $1.56 per share and has a dividend yield of 1.1%. Morningstar pays an annual dividend of $0.92 per share and has a dividend yield of 1.1%. Equifax pays out 33.1% of its earnings in the form of a dividend. Morningstar pays out 24.1% 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. Morningstar has raised its dividend for 5 consecutive years. Morningstar is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Equifax and Morningstar’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Equifax||$3.29 billion||5.15||$1.22 billion||$4.72||29.81|
|Morningstar||$847.00 million||4.12||$228.30 million||$3.82||21.49|
Equifax has higher revenue and earnings than Morningstar. Morningstar is trading at a lower price-to-earnings ratio than Equifax, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Equifax has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Morningstar has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.
This table compares Equifax and Morningstar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
89.6% of Equifax shares are owned by institutional investors. Comparatively, 38.8% of Morningstar shares are owned by institutional investors. 1.3% of Equifax shares are owned by insiders. Comparatively, 57.4% of Morningstar shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Equifax beats Morningstar on 11 of the 16 factors compared between the two stocks.
Equifax Company Profile
Equifax Inc. is a global provider of information solutions and human resources business process outsourcing services for businesses, governments and consumers. The Company operates in four segments: U.S. Information Solutions (USIS), International, Workforce Solutions and Global Consumer Solutions. Its products and services are based on databases of consumer and business information derived from various sources, including credit, financial assets, telecommunications and utility payments, employment, income, demographic and marketing data. It uses statistical techniques and software tools to analyze all available data, creating customized insights, decision-making solutions and processing services for its clients. It helps consumers understand, manage and protect their personal information and make more informed financial decisions. The Company also provides information, technology and services to support debt collections and recovery management.
Morningstar Company Profile
Morningstar, Inc. is a provider of independent investment research in North America, Europe, Australia, and Asia. The Company focuses to create products that help investors reach their financial goals. It offers a range of data, software, research, and investment management offerings for financial advisors, asset managers, sponsors, and individual investors. It provides data and research insights on a range of investment offerings, including managed investment products, listed companies, capital markets, and real-time global market data. It conducts its business operations outside of the United States through subsidiaries in countries, including Australia, Brazil, Canada, Chile, Denmark, France, Germany, India, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, People’s Republic of China (both Hong Kong and the mainland), Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, the United Arab Emirates, and the United Kingdom.
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