Greystone Housing Impact Investors (NYSE:GHI) versus StepStone Group (NASDAQ:STEP) Critical Review

StepStone Group (NASDAQ:STEP) and Greystone Housing Impact Investors (NYSE:GHI) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Profitability

This table compares StepStone Group and Greystone Housing Impact Investors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
StepStone Group	-40.06%	21.53%	5.22%
Greystone Housing Impact Investors	8.11%	8.07%	1.55%

Dividends

StepStone Group pays an annual dividend of $1.12 per share and has a dividend yield of 1.5%. Greystone Housing Impact Investors pays an annual dividend of $1.00 per share and has a dividend yield of 13.3%. StepStone Group pays out -14.0% of its earnings in the form of a dividend. Greystone Housing Impact Investors pays out 555.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. StepStone Group has raised its dividend for 3 consecutive years and Greystone Housing Impact Investors has raised its dividend for 4 consecutive years. Greystone Housing Impact Investors is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for StepStone Group and Greystone Housing Impact Investors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
StepStone Group	1	2	4	2	2.78
Greystone Housing Impact Investors	1	0	4	0	2.60

StepStone Group presently has a consensus target price of $74.57, indicating a potential upside of 1.78%. Greystone Housing Impact Investors has a consensus target price of $13.00, indicating a potential upside of 73.29%. Given Greystone Housing Impact Investors’ higher possible upside, analysts plainly believe Greystone Housing Impact Investors is more favorable than StepStone Group.

Earnings & Valuation

This table compares StepStone Group and Greystone Housing Impact Investors”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
StepStone Group	$1.17 billion	7.38	-$179.56 million	($8.00)	-9.16
Greystone Housing Impact Investors	$91.27 million	1.94	$21.32 million	$0.18	41.68

Greystone Housing Impact Investors has lower revenue, but higher earnings than StepStone Group. StepStone Group is trading at a lower price-to-earnings ratio than Greystone Housing Impact Investors, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

55.5% of StepStone Group shares are owned by institutional investors. Comparatively, 9.0% of Greystone Housing Impact Investors shares are owned by institutional investors. 16.5% of StepStone Group shares are owned by insiders. Comparatively, 1.8% of Greystone Housing Impact Investors shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

StepStone Group has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Greystone Housing Impact Investors has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Summary

StepStone Group beats Greystone Housing Impact Investors on 10 of the 17 factors compared between the two stocks.

About StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.

About Greystone Housing Impact Investors

Greystone Housing Impact Investors LP acquires, holds, sells, and deals in a portfolio of mortgage revenue bonds (MRBs) that are issued to provide construction and/or permanent financing for multifamily, student, and senior citizen housing; skilled nursing properties; and commercial properties in the United States. The company operates in four segments: Affordable Multifamily MRB Investments; Seniors and Skilled Nursing MRB Investments; MF Properties; Market-Rate Joint Venture Investments. It also invests in governmental issuer loans. The company was formerly known as America First Multifamily Investors, L.P. and changed its name to Greystone Housing Impact Investors LP in December 2022. Greystone Housing Impact Investors LP was incorporated in 1998 and is based in Omaha, Nebraska.