Head to Head Survey: Morningstar (NASDAQ:MORN) & Robinhood Markets (NASDAQ:HOOD)

Morningstar (NASDAQ:MORN) and Robinhood Markets (NASDAQ:HOOD) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Morningstar and Robinhood Markets, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morningstar	0	1	2	0	2.67
Robinhood Markets	0	5	23	2	2.90

Morningstar currently has a consensus target price of $227.33, indicating a potential upside of 13.30%. Robinhood Markets has a consensus target price of $133.71, indicating a potential upside of 22.10%. Given Robinhood Markets’ stronger consensus rating and higher possible upside, analysts clearly believe Robinhood Markets is more favorable than Morningstar.

Profitability

This table compares Morningstar and Robinhood Markets’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Morningstar	16.43%	38.57%	12.22%
Robinhood Markets	42.01%	22.43%	4.56%

Valuation and Earnings

This table compares Morningstar and Robinhood Markets”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Morningstar	$2.45 billion	3.08	$374.20 million	$10.56	19.00
Robinhood Markets	$4.47 billion	22.01	$1.88 billion	$2.27	48.24

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

Volatility and Risk

Morningstar has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Robinhood Markets has a beta of 2.35, suggesting that its share price is 135% more volatile than the S&P 500.

Insider and Institutional Ownership

57.0% of Morningstar shares are held by institutional investors. Comparatively, 93.3% of Robinhood Markets shares are held by institutional investors. 38.8% of Morningstar shares are held by company insiders. Comparatively, 13.5% of Robinhood Markets shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Robinhood Markets beats Morningstar on 11 of the 15 factors compared between the two stocks.

About Morningstar

Morningstar, Inc. provides independent investment insights in the United States, Asia. Australia, Continental Europe, the United Kingdom, and internationally. The company operates in five segments: Morningstar Data and Analytics; PitchBook; Morningstar Wealth; Morningstar Credit; and Morningstar Retirement. The company offers managing investments, including mutual funds, ETFs, separate accounts, collective investment trusts, model portfolios, equities, and fixed income securities; Morningstar Direct is an investment-analysis and reporting platform; Morningstar Advisor Workstation, a suite of tool to provide help and advice. The PitchBook segment provides data and research covering the private capital markets comprising venture capital, private equity, private credit and bank loans, and merger and acquisition activities; and pitchbook platform. It provides model portfolios and wealth platforms; Morningstar Managed Portfolios, an advisor service with model portfolios designed for fee-based independent financial advisors; and Morningstar.com that discovers, evaluates, and monitors stocks, ETFs, and mutual funds; build and monitor portfolios and markets. In addition, the company provides credit ratings, research, data, and credit analytics solutions; Morningstar DBRS which offers securitizations and other structured finance instruments, such as asset-backed securities, residential mortgage-backed securities, commercial mortgage-backed securities, and collateralized loan obligations. Further, it offers managed retirement accounts, fiduciary services, Morningstar Lifetime Allocation funds, and custom models; Morningstar Indexes offers market indexes used for performance benchmarks and as the basis for investment products and other portfolio strategies; and Morningstar Sustainalytics provides environmental, social and governance data, research, analysis, and insights. Morningstar, Inc. was incorporated in 1984 and is headquartered in Chicago, Illinois.

About Robinhood Markets

Robinhood Markets, Inc. operates financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds (ETFs), American depository receipts, options, gold, and cryptocurrencies. The company offers fractional trading, recurring investments, fully-paid securities lending, access to investing on margin, cash sweep, instant withdrawals, retirement program, around-the-clock trading, and initial public offerings participation services. It also provides various learning and education solutions comprise Snacks, an accessible digest of business news stories for a new generation of investors.; Learn, which is an online collection of beginners' guides, feature tutorials, and financial dictionary; Newsfeeds that offer access to free, premium news from sites from various sites, such as Barron's, Reuters, and Dow Jones. In addition, the company offers In-App Education, a resource that covers investing fundamentals, including why people invest, a stock market overview, and tips on how to define investing goals, as well as allows customers to understand the basics of investing before their first trade; and Crypto Learn and Earn, an educational module available to various crypto customers through Robinhood Learn to teach customers the basics related to cryptocurrency. Further, it provides Robinhood credit cards, cash card and spending accounts, and wallets. Robinhood Markets, Inc. was incorporated in 2013 and is headquartered in Menlo Park, California.