Contrasting Hennessy Advisors (NASDAQ:HNNA) & Nasdaq (NASDAQ:NDAQ)

Nasdaq (NASDAQ:NDAQ) and Hennessy Advisors (NASDAQ:HNNA) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Earnings and Valuation

This table compares Nasdaq and Hennessy Advisors”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nasdaq	$8.22 billion	6.27	$1.79 billion	$3.43	26.89
Hennessy Advisors	$35.54 million	2.28	$9.96 million	$1.04	9.88

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

Risk and Volatility

Nasdaq has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Hennessy Advisors has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Insider & Institutional Ownership

72.5% of Nasdaq shares are owned by institutional investors. Comparatively, 10.3% of Hennessy Advisors shares are owned by institutional investors. 0.6% of Nasdaq shares are owned by insiders. Comparatively, 36.0% of Hennessy Advisors shares are owned by 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 Nasdaq and Hennessy Advisors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nasdaq	22.60%	18.38%	7.63%
Hennessy Advisors	24.77%	8.31%	5.48%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Nasdaq and Hennessy Advisors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nasdaq	0	3	9	1	2.85
Hennessy Advisors	0	1	0	0	2.00

Nasdaq presently has a consensus price target of $109.25, indicating a potential upside of 18.44%. Given Nasdaq’s stronger consensus rating and higher probable upside, equities analysts clearly believe Nasdaq is more favorable than Hennessy Advisors.

Dividends

Nasdaq pays an annual dividend of $1.24 per share and has a dividend yield of 1.3%. Hennessy Advisors pays an annual dividend of $0.60 per share and has a dividend yield of 5.8%. Nasdaq pays out 36.2% of its earnings in the form of a dividend. Hennessy Advisors pays out 57.7% 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. Nasdaq has increased its dividend for 14 consecutive years.

Summary

Nasdaq beats Hennessy Advisors on 15 of the 18 factors compared between the two stocks.

About Nasdaq

Nasdaq, Inc. operates as a technology company that serves capital markets and other industries worldwide. It operates in three segments: Capital Access Platforms, Financial Technology, and Market Services. The Capital Access Platforms segment sells and distributes historical and real-time market data; and develops and licenses Nasdaq-branded indices and financial products. This segment also offers investor relations intelligence, governance solutions, and ESG solutions; and insights and workflow solutions, as well as operates listing platforms. The Financial Technology segment offers Verafin, a cloud-based platform to detect, investigate, and report money laundering and financial frauds; surveillance solutions, including a SaaS platform to assist in complying with market rules, regulations, and internal market surveillance policies; AxiomSL, a risk data management and regulatory reporting solution; and Calypso, a front-to-back trading technology solution for the financial market. This segment also handles assets, comprising cash equities, equity derivatives, currencies, various interest-bearing securities, commodities, energy products, and digital currencies; and trade management and colocation services. The Market Platforms segment offers equity derivative trading and clearing, cash equity trading, fixed income and commodities trading and clearing, and currency trading services. This segment operates various exchanges and other marketplace facilities across various asset classes which includes derivatives, commodities, cash equity, debt, structured products, and exchange traded products; and provides clearing, settlement, and central depository services. The company was formerly known as The NASDAQ OMX Group, Inc. and changed its name to Nasdaq, Inc. in September 2015. Nasdaq, Inc. was founded in 1971 and is headquartered in New York, New York.

About Hennessy Advisors

Hennessy Advisors, Inc. is an employee owned investment manager. It provides its services to Hennessy Funds and investment companies. The firm launches and manages equity, fixed income, and balanced mutual funds. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth stocks of companies. It conducts in-house research to make its investments. Hennessy Advisors, Inc. was founded in 1989 and is based in Novato, California with additional offices in Boston, Massachusetts and Chapel Hill, North Carolina.