Analyzing ONEX (OTCMKTS:ONEXF) and Hennessy Advisors (NASDAQ:HNNA)

ONEX (OTCMKTS:ONEXF) and Hennessy Advisors (NASDAQ:HNNA) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.

Volatility & Risk

ONEX has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Hennessy Advisors has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Institutional & Insider Ownership

0.7% of ONEX shares are held by institutional investors. Comparatively, 10.3% of Hennessy Advisors shares are held by institutional investors. 36.0% of Hennessy Advisors shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

ONEX pays an annual dividend of $0.28 per share and has a dividend yield of 0.4%. Hennessy Advisors pays an annual dividend of $0.60 per share and has a dividend yield of 5.8%. ONEX pays out 4.2% of its earnings in the form of a dividend. Hennessy Advisors pays out 57.7% 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 current ratings and price targets for ONEX and Hennessy Advisors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ONEX	0	1	4	0	2.80
Hennessy Advisors	0	1	0	0	2.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ONEX	63.83%	5.24%	4.21%
Hennessy Advisors	24.77%	8.31%	5.48%

Earnings & Valuation

This table compares ONEX and Hennessy Advisors”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ONEX	$899.00 million	6.31	$617.00 million	$6.68	11.14
Hennessy Advisors	$35.54 million	2.31	$9.96 million	$1.04	9.98

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

Summary

ONEX beats Hennessy Advisors on 10 of the 15 factors compared between the two stocks.

About ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.

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.