Msci (NYSE: GRUB) and GrubHub (NYSE:GRUB) are both large-cap computer and technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Dividends

Msci pays an annual dividend of $2.32 per share and has a dividend yield of 1.3%. GrubHub does not pay a dividend. Msci pays out 58.3% of its earnings in the form of a dividend. Msci has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

91.2% of Msci shares are owned by institutional investors. Comparatively, 100.0% of GrubHub shares are owned by institutional investors. 2.3% of Msci shares are owned by company insiders. Comparatively, 2.4% of GrubHub shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Msci and GrubHub’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Msci 27.83% 114.65% 12.93%
GrubHub 15.16% 10.52% 8.02%

Analyst Recommendations

This is a summary of recent ratings and target prices for Msci and GrubHub, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Msci 0 3 5 0 2.63
GrubHub 2 11 12 0 2.40

Msci presently has a consensus price target of $181.14, indicating a potential downside of 0.57%. GrubHub has a consensus price target of $131.52, indicating a potential downside of 9.98%. Given Msci’s stronger consensus rating and higher possible upside, analysts clearly believe Msci is more favorable than GrubHub.

Volatility and Risk

Msci has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, GrubHub has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Earnings & Valuation

This table compares Msci and GrubHub’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Msci $1.27 billion 12.70 $303.97 million $3.98 45.77
GrubHub $683.07 million 19.35 $98.98 million $0.98 149.09

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

Summary

Msci beats GrubHub on 10 of the 17 factors compared between the two stocks.

About Msci

MSCI Inc., together with its subsidiaries, provides investment decision support tools for the clients to manage their investment processes worldwide. The company operates through four segments: Index, Analytics, ESG, and Real Estate. The Index segment primarily provides equity indexes for use in various areas of the investment process, including index-linked product creation and performance benchmarking, as well as portfolio construction and rebalancing, and asset allocation. The Analytics segment offers risk management, performance attribution, and portfolio management content, applications, and services that provide clients with an integrated view of risk and return, and an analysis of market, credit, liquidity, and counterparty risk across various asset classes, spanning short, medium, and long-term time horizons; and various managed services for clients to address the needs of various specialized areas of the investment community by providing a reporting service and performance reporting tools to institutional consultants and investors in hedge funds. The ESG segment provides products and services that help institutional investors understand how environmental, social, and governance (ESG) factors impact the long-term risk of their investments; and data and ratings products for use in the construction of equity and fixed income indexes to help institutional investors benchmark ESG investment performance and issue index-based investment products, as well as manage, measure, and report on ESG mandates. The Real Estate segment offers real estate performance analysis for funds, investors, managers, and lenders. This segment provides products and services that include research, reporting, and benchmarking; and business intelligence to real estate owners, managers, developers, and brokers. MSCI Inc. was founded in 1998 and is headquartered in New York, New York.

About GrubHub

GrubHub Inc., together with its subsidiaries, provides an online and mobile platform for restaurant pick-up and delivery orders in the United States. The company connects approximately 80,000 local restaurants with diners in approximately 1,600 cities. It offers Grubhub, Seamless, and Eat24 mobile applications and mobile Websites for iPhone, Android, iPad, Apple Watch, and Apple TV devices; and operates Grubhub, Seamless, and Eat24 Websites through grubhub.com, seamless.com, and eat24.com. The company also provides corporate program that offers employees with various food and ordering options, including options for individual meals, group ordering, and catering, as well as proprietary tools that consolidate various food ordering into a single online account. In addition, it offers Allmenus.com and MenuPages.com, which provide an aggregated database of approximately 650,000 menus from restaurants in 50 states; Grubhub for Restaurants, a responsive Web application that can be accessed from computers and mobile devices, as well as Grubhub-provided tablets; point of sale (POS) integration, which allows restaurants to manage Grubhub orders and update their menus directly from their existing POS system; and Website design and hosting services for restaurants. The company was formerly known as GrubHub Seamless Inc. and changed its name to GrubHub Inc. in February 2014. GrubHub Inc. was founded in 1999 and is headquartered in Chicago, Illinois.

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