Analyzing Diamond Hill Investment Group (DHIL) and BlackRock (BLK)

Diamond Hill Investment Group (NASDAQ: DHIL) and BlackRock (NYSE:BLK) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, risk and profitability.

Risk and Volatility

Diamond Hill Investment Group has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, BlackRock has a beta of 1.75, meaning that its share price is 75% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Diamond Hill Investment Group and BlackRock, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diamond Hill Investment Group 0 0 0 0 N/A
BlackRock 0 4 8 0 2.67

BlackRock has a consensus target price of $542.42, suggesting a potential downside of 1.33%. Given BlackRock’s higher probable upside, analysts clearly believe BlackRock is more favorable than Diamond Hill Investment Group.

Profitability

This table compares Diamond Hill Investment Group and BlackRock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diamond Hill Investment Group 35.08% 31.76% 23.11%
BlackRock 39.79% 12.54% 1.67%

Valuation & Earnings

This table compares Diamond Hill Investment Group and BlackRock’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diamond Hill Investment Group $136.10 million 5.30 $46.05 million $15.03 13.84
BlackRock $12.49 billion 7.09 $4.97 billion $22.97 23.93

BlackRock has higher revenue and earnings than Diamond Hill Investment Group. Diamond Hill Investment Group is trading at a lower price-to-earnings ratio than BlackRock, indicating that it is currently the more affordable of the two stocks.

Dividends

BlackRock pays an annual dividend of $10.00 per share and has a dividend yield of 1.8%. Diamond Hill Investment Group does not pay a dividend. BlackRock pays out 43.5% of its earnings in the form of a dividend. Diamond Hill Investment Group has increased its dividend for 8 consecutive years.

Institutional and Insider Ownership

62.3% of Diamond Hill Investment Group shares are owned by institutional investors. Comparatively, 82.4% of BlackRock shares are owned by institutional investors. 7.3% of Diamond Hill Investment Group shares are owned by insiders. Comparatively, 1.9% of BlackRock shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

BlackRock beats Diamond Hill Investment Group on 11 of the 16 factors compared between the two stocks.

Diamond Hill Investment Group Company Profile

Diamond Hill Investment Group, Inc. provides investment advisory and fund administration services. The Company’s subsidiaries include Diamond Hill Capital Management, Inc. (DHCM), Beacon Hill Fund Services, Inc. (BHFS) and BHIL Distributors, Inc. (BHIL). The Company’s primary objective is to fulfill its fiduciary duty to clients. The Company provides investment management and administration services to mutual funds, institutional accounts and private investment funds. DHCM is an investment advisor to the Diamond Hill Funds (the Funds), a series of open-end mutual funds, private investment funds (Private Funds), an exchange traded fund and other institutional accounts. In addition, DHCM is administrator for the Funds. BHFS provides compliance, treasury and other fund administration services to investment advisors and mutual funds. BHIL is a subsidiary of BHFS. BHIL provides underwriting services to mutual funds. BHFS and BHIL collectively operate as Beacon Hill.

BlackRock Company Profile

BlackRock, Inc. (BlackRock) is an investment management company. BlackRock provides a range of investment and risk management services to institutional and retail clients worldwide. Its diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Its product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Its products are offered directly and through intermediaries in a range of vehicles, including open-end and closed-end mutual funds, iShares exchange-traded funds (ETFs), separate accounts, collective investment funds and other pooled investment vehicles. It offers its Aladdin investment system, as well as risk management, outsourcing, advisory and technology services, to institutional investors and wealth management intermediaries under the BlackRock Solutions name.

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