Reviewing Morningstar (MORN) and Elevate Credit (ELVT)

Morningstar (NASDAQ: MORN) and Elevate Credit (NYSE:ELVT) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Profitability

This table compares Morningstar and Elevate Credit’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Morningstar 19.43% 15.55% 8.52%
Elevate Credit N/A -42.13% -2.78%

Dividends

Morningstar pays an annual dividend of $0.92 per share and has a dividend yield of 1.1%. Elevate Credit does not pay a dividend. Morningstar pays out 24.1% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Morningstar and Elevate Credit’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Morningstar $847.00 million 4.26 $228.30 million $3.82 22.21
Elevate Credit $629.78 million 0.50 $58.65 million N/A N/A

Morningstar has higher revenue and earnings than Elevate Credit.

Institutional and Insider Ownership

38.3% of Morningstar shares are owned by institutional investors. Comparatively, 51.9% of Elevate Credit shares are owned by institutional investors. 57.4% of Morningstar shares are owned 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Morningstar and Elevate Credit, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morningstar 0 0 0 0 N/A
Elevate Credit 0 2 6 0 2.75

Elevate Credit has a consensus price target of $10.64, suggesting a potential upside of 41.34%. Given Elevate Credit’s higher possible upside, analysts clearly believe Elevate Credit is more favorable than Morningstar.

Summary

Morningstar beats Elevate Credit on 8 of the 12 factors compared between the two stocks.

About Morningstar

Morningstar, Inc. is a provider of independent investment research in North America, Europe, Australia, and Asia. The Company focuses to create products that help investors reach their financial goals. It offers a range of data, software, research, and investment management offerings for financial advisors, asset managers, sponsors, and individual investors. It provides data and research insights on a range of investment offerings, including managed investment products, listed companies, capital markets, and real-time global market data. It conducts its business operations outside of the United States through subsidiaries in countries, including Australia, Brazil, Canada, Chile, Denmark, France, Germany, India, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, People’s Republic of China (both Hong Kong and the mainland), Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, the United Arab Emirates, and the United Kingdom.

About Elevate Credit

Elevate Credit, Inc. provides online credit solutions to non-prime consumers, typically defined as those with credit scores of less than 700. The Company uses advanced technology risk analytics to provide financial options to its customers, who are not well-served by either banks or legacy non-prime lenders. It offers online installment loans and lines of credit in the United States, and the United Kingdom. Its products, Rise, Elastic and Sunny, provide customers with access to priced credit and services while helping them with credit building and financial wellness features. Its products include credit building and financial wellness programs, such as credit reporting, free credit monitoring (in the United States) and online financial literacy videos and tools. Rise is an installment loan product. As of March 31, 2016, Rise was available in 15 states in the United States. Sunny is the Company’s United Kingdom installment loan product.

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