Morgan Stanley (NYSE:MS) vs. Blue Owl Capital (NYSE:OWL) Critical Review

Blue Owl Capital (NYSE:OWL – Get Free Report) and Morgan Stanley (NYSE:MS – Get Free Report) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Dividends

Blue Owl Capital pays an annual dividend of $0.92 per share and has a dividend yield of 9.9%. Morgan Stanley pays an annual dividend of $4.60 per share and has a dividend yield of 2.3%. Blue Owl Capital pays out 766.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Morgan Stanley pays out 37.2% of its earnings in the form of a dividend. Blue Owl Capital has increased its dividend for 4 consecutive years and Morgan Stanley has increased its dividend for 12 consecutive years.

Volatility and Risk

Blue Owl Capital has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500. Comparatively, Morgan Stanley has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Blue Owl Capital and Morgan Stanley, as provided by MarketBeat.

Blue Owl Capital presently has a consensus price target of $13.77, suggesting a potential upside of 47.83%. Morgan Stanley has a consensus price target of $223.90, suggesting a potential upside of 14.04%. Given Blue Owl Capital’s higher probable upside, analysts plainly believe Blue Owl Capital is more favorable than Morgan Stanley.

Institutional and Insider Ownership

35.9% of Blue Owl Capital shares are held by institutional investors. Comparatively, 84.2% of Morgan Stanley shares are held by institutional investors. 25.7% of Blue Owl Capital shares are held by insiders. Comparatively, 0.2% of Morgan Stanley shares are held 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.

Profitability

This table compares Blue Owl Capital and Morgan Stanley’s net margins, return on equity and return on assets.

Earnings and Valuation

This table compares Blue Owl Capital and Morgan Stanley”s gross revenue, earnings per share (EPS) and valuation.

Morgan Stanley has higher revenue and earnings than Blue Owl Capital. Morgan Stanley is trading at a lower price-to-earnings ratio than Blue Owl Capital, indicating that it is currently the more affordable of the two stocks.

Summary

Morgan Stanley beats Blue Owl Capital on 10 of the 18 factors compared between the two stocks.

About Blue Owl Capital

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Blue Owl Capital Inc. operates as an asset manager in the United States. The company offers permanent capital base solutions that enables it to offer holistic framework of capital solutions to middle market companies, large alternative asset managers, and corporate real estate owners and tenants. It also provides direct lending products that offer private credit products comprising diversified, technology, first lien, and opportunistic lending to middle-market companies; liquid credit; GP strategic capital products, which offers capital solutions, including GP minority stakes, GP debt financing, and professional sports minority stakes; and real estate products that focuses on acquiring triple net lease real estate by investment grade or creditworthy tenants. It offers its solutions through permanent capital vehicles, as well as long-dated private funds. Blue Owl Capital Inc. is headquartered in New York, New York.

About Morgan Stanley

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Morgan Stanley, a financial holding company, provides various financial products and services to corporations, governments, financial institutions, and individuals in the Americas, Europe, the Middle East, Africa, and Asia. It operates through Institutional Securities, Wealth Management, and Investment Management segments. The Institutional Securities segment offers capital raising and financial advisory services, including services related to the underwriting of debt, equity, and other securities, as well as advice on mergers and acquisitions, restructurings, real estate, and project finance. This segment also provides equity and fixed income products comprising sales, financing, prime brokerage, and market-making services; foreign exchange and commodities; corporate and commercial real estate loans, commercial mortgage and secured lending facilities, and financing for sales and trading customers, and asset-backed and mortgage lending; and wealth management services, investment, and research services. The Wealth Management segment offers financial advisor-led brokerage, custody, administrative, and investment advisory services; self-directed brokerage services; financial and wealth planning services; workplace services, including stock plan administration; annuity and insurance products; securities-based lending, residential real estate loans, and other lending products; banking; and retirement plan services to individual investors and small to medium-sized businesses and institutions. The Investment Management segment provides equity, fixed income, alternatives and solutions, and liquidity and overlay services to benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, third-party fund sponsors, corporations, and individuals through institutional and intermediary channels. The company was founded in 1924 and is headquartered in New York, New York.