Comparing SEI Investments (NASDAQ:SEIC) & MSCI (NYSE:MSCI)

MSCI (NYSE:MSCI) and SEI Investments (NASDAQ:SEIC) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Dividends

MSCI pays an annual dividend of $8.20 per share and has a dividend yield of 1.4%. SEI Investments pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. MSCI pays out 52.3% of its earnings in the form of a dividend. SEI Investments pays out 18.5% 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. MSCI has raised its dividend for 11 consecutive years and SEI Investments has raised its dividend for 34 consecutive years.

Earnings and Valuation

This table compares MSCI and SEI Investments”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MSCI	$3.13 billion	13.31	$1.20 billion	$15.69	36.20
SEI Investments	$2.30 billion	4.20	$715.30 million	$5.63	14.17

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

Analyst Ratings

This is a summary of current ratings and price targets for MSCI and SEI Investments, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MSCI	0	3	7	1	2.82
SEI Investments	0	2	7	0	2.78

MSCI currently has a consensus target price of $665.89, suggesting a potential upside of 17.25%. SEI Investments has a consensus target price of $105.83, suggesting a potential upside of 32.64%. Given SEI Investments’ higher possible upside, analysts clearly believe SEI Investments is more favorable than MSCI.

Institutional and Insider Ownership

90.0% of MSCI shares are held by institutional investors. Comparatively, 70.6% of SEI Investments shares are held by institutional investors. 3.8% of MSCI shares are held by company insiders. Comparatively, 14.6% of SEI Investments shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares MSCI and SEI Investments’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MSCI	38.36%	-82.59%	24.29%
SEI Investments	31.14%	30.26%	25.33%

Volatility and Risk

MSCI has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, SEI Investments has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Summary

MSCI beats SEI Investments on 11 of the 17 factors compared between the two stocks.

About MSCI

MSCI Inc., together with its subsidiaries, provides critical decision support tools and solutions for the investment community to manage investment processes worldwide. The Index segment provides indexes for use in various areas of the investment process, including indexed financial product, such as ETFs, mutual funds, annuities, futures, options, structured products, and over-the-counter derivatives; performance benchmarking; portfolio construction and rebalancing; and asset allocation, as well as licenses GICS and GICS Direct. The Analytics segment offers risk management, performance attribution and portfolio management content, application, an integrated view of risk and return service, and an analysis of market, credit, liquidity, counterparty, and climate risk across asset classes; managed services, including consolidation of client portfolio data, review and reconciliation of input data and results, and customized reporting; and HedgePlatform to measure, evaluate, and monitor the risk of hedge fund investments. The ESG and Climate segment provides products and services that help institutional investors understand how ESG impacts the long-term risk and return of their portfolio and individual security-level investments; and data, ratings, research, and tools to help investors navigate increasing regulation. The All Other Private Assets segment includes real estate and infrastructure data, benchmarks, return-analytics, climate assessments and market insights; business intelligence to real estate owners, managers, developers, and brokers; and offers investment decision support tools for private capital. The Private Capital Solutions segment offers tools to help private asset investors across mission-critical workflows, such as sourcing terms and conditions, evaluating operating performance, managing risk and other activities supporting private capital investing. MSCI Inc. was incorporated in 1998 and is headquartered in New York, New York.

About SEI Investments

SEI Investments Company is a publicly owned asset management holding company. Through its subsidiaries, the firm provides wealth management, retirement and investment solutions, asset management, asset administration, investment processing outsourcing solutions, financial services, and investment advisory services to its clients. It provides its services to private banks, independent financial advisers, institutional investors, investment managers, investment advisors, wealth management organizations, corporations, retirement scheme sponsors, not-for-profit organizations, hedge fund managers, registered investment advisers, independent broker-dealers, financial planners, life insurance agents, defined-benefit schemes, defined-contribution schemes, endowments, foundations, and board-designated fund, through its subsidiaries. Through its subsidiaries, the firm manages separate client-focused portfolios. It also launches and manages equity, fixed income, and balanced mutual funds, through its subsidiaries. Through its subsidiaries, the firm invests in public equity and fixed income markets. It employs fundamental and quantitative analysis with a focus on top-down and bottom-up analysis to make its investments, through its subsidiaries. SEI Investments Company was founded in 1968 and is based in Oaks, Pennsylvania.