Trinity Capital (NASDAQ:TRIN – Get Free Report) and Morningstar (NASDAQ:MORN – Get Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.
Analyst Recommendations
This is a breakdown of recent ratings for Trinity Capital and Morningstar, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Trinity Capital | 1 | 1 | 4 | 1 | 2.71 |
| Morningstar | 0 | 1 | 2 | 0 | 2.67 |
Trinity Capital presently has a consensus target price of $16.67, indicating a potential downside of 5.38%. Morningstar has a consensus target price of $227.33, indicating a potential upside of 11.53%. Given Morningstar’s higher possible upside, analysts clearly believe Morningstar is more favorable than Trinity Capital.
Dividends
Institutional & Insider Ownership
24.6% of Trinity Capital shares are owned by institutional investors. Comparatively, 57.0% of Morningstar shares are owned by institutional investors. 4.3% of Trinity Capital shares are owned by insiders. Comparatively, 38.8% of Morningstar shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Trinity Capital and Morningstar’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Trinity Capital | 43.45% | 14.94% | 6.69% |
| Morningstar | 16.43% | 38.57% | 12.22% |
Risk and Volatility
Trinity Capital has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, Morningstar has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.
Valuation & Earnings
This table compares Trinity Capital and Morningstar”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Trinity Capital | $216.31 million | 7.71 | $135.60 million | $1.75 | 10.07 |
| Morningstar | $2.45 billion | 3.13 | $374.20 million | $10.56 | 19.30 |
Morningstar has higher revenue and earnings than Trinity Capital. Trinity Capital is trading at a lower price-to-earnings ratio than Morningstar, indicating that it is currently the more affordable of the two stocks.
Summary
Morningstar beats Trinity Capital on 12 of the 18 factors compared between the two stocks.
About Trinity Capital
Trinity Capital Inc. is a business development company. It is a venture capital firm specializing in venture debt to growth stage companies looking for loans and/or equipment financing. Trinity Capital Inc. was founded in 2019 is based in Phoenix, Arizona with additional offices in the United States.
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.
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