Houlihan Lokey (NYSE:HLI – Get Free Report) and StoneX Group (NASDAQ:SNEX – Get Free Report) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.
Profitability
This table compares Houlihan Lokey and StoneX Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Houlihan Lokey | 16.10% | 20.20% | 11.71% |
| StoneX Group | 0.33% | 20.18% | 1.05% |
Valuation & Earnings
This table compares Houlihan Lokey and StoneX Group”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Houlihan Lokey | $2.52 billion | 3.48 | $425.70 million | $5.95 | 21.36 |
| StoneX Group | $157.71 billion | 0.05 | $305.90 million | $4.19 | 16.09 |
Houlihan Lokey has higher earnings, but lower revenue than StoneX Group. StoneX Group is trading at a lower price-to-earnings ratio than Houlihan Lokey, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
78.1% of Houlihan Lokey shares are held by institutional investors. Comparatively, 75.9% of StoneX Group shares are held by institutional investors. 22.5% of Houlihan Lokey shares are held by insiders. Comparatively, 11.8% of StoneX Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Houlihan Lokey and StoneX Group, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Houlihan Lokey | 1 | 4 | 5 | 0 | 2.40 |
| StoneX Group | 0 | 2 | 1 | 1 | 2.75 |
Houlihan Lokey currently has a consensus price target of $166.38, indicating a potential upside of 30.89%. StoneX Group has a consensus price target of $112.00, indicating a potential upside of 66.10%. Given StoneX Group’s stronger consensus rating and higher probable upside, analysts clearly believe StoneX Group is more favorable than Houlihan Lokey.
Volatility and Risk
Houlihan Lokey has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, StoneX Group has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500.
Summary
Houlihan Lokey beats StoneX Group on 11 of the 15 factors compared between the two stocks.
About Houlihan Lokey
Houlihan Lokey, Inc., an investment banking company, provides merger and acquisition (M&A), capital market, financial restructuring, and financial and valuation advisory services worldwide. It operates in three segments: Corporate Finance, Financial Restructuring, and Financial and Valuation Advisory. The Corporate Finance segment offers general financial advisory services; and advises public and private institutions on buy-side and sell-side transactions, leveraged loans, private mezzanine debt, high-yield debt, initial public offerings, follow-ons, convertibles, equity private placements, private equity, and liability management transactions, as well as advise financial sponsors on various transactions. The Financial Restructuring segment advises debtors, creditors, and other parties-in-interest related to recapitalization/deleveraging transactions. It also provides a range of advisory services, including structuring, negotiation, and confirmation of plans of reorganization; structuring and analysis of exchange offers; corporate viability assessment; dispute resolution and expert testimony; and procuring debtor-in-possession financing. The Financial and Valuation Advisory segment offers valuations of various assets, such as companies, illiquid debt and equity securities, and intellectual property. It also provides fairness opinions in connection with M&A and other transactions, solvency opinions in connection with corporate spin-offs and dividend recapitalizations, and other types of financial opinions. In addition, this segment offers dispute resolution services. It serves corporations, financial sponsors, and government agencies. The company was incorporated in 1972 and is headquartered in Los Angeles, California.
About StoneX Group
StoneX Group Inc. operates as a global financial services network that connects companies, organizations, traders, and investors to market ecosystem worldwide. The company operates through Commercial, Institutional, Retail, and Global Payments segments. The Commercial segment provides risk management and hedging, exchange-traded and OTC products execution and clearing, voice brokerage, market intelligence, physical trading, and commodity financing and logistics services. The Institutional segment offers equity trading services to institutional clients; clearing and execution services in futures exchanges; brokerage foreign exchange services for the financial institutions and professional traders; and OTC products, as well as originates, structures, and places debt instruments in capital markets. This segment also operates as an institutional dealer in fixed income securities to serve asset managers, commercial bank trust and investment departments, broker-dealers, and insurance companies, as well as engages in asset management business. The Retail segment provides trading services and solutions in the global financial markets, including spot foreign exchange, precious metals trading, and contracts for differences; and wealth management services, as well as offers physical gold and other precious metals in various forms and denominations through Stonexbullion.com. The Global Payments segment provides customized payment, technology, and treasury services to banks and commercial businesses, charities, and non-governmental and government organizations; and pricing and payments services. The company was formerly known as INTL FCStone Inc. and changed its name to StoneX Group Inc. in July 2020. StoneX Group Inc. was founded in 1924 and is headquartered in New York, New York.
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