Critical Comparison: Morningstar (MORN) & TransUnion (TRU)

Morningstar (NASDAQ: MORN) and TransUnion (NYSE:TRU) are both mid-cap business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Analyst Recommendations

This is a summary of current recommendations and price targets for Morningstar and TransUnion, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morningstar 0 0 0 0 N/A
TransUnion 0 1 7 0 2.88

TransUnion has a consensus price target of $47.38, indicating a potential downside of 4.98%. Given TransUnion’s higher probable upside, analysts plainly believe TransUnion is more favorable than Morningstar.

Valuation and Earnings

This table compares Morningstar and TransUnion’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Morningstar $847.00 million 4.26 $228.30 million $3.82 22.20
TransUnion $1.80 billion 5.04 $636.70 million $1.16 42.98

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

Dividends

Morningstar pays an annual dividend of $0.92 per share and has a dividend yield of 1.1%. TransUnion does not pay a dividend. Morningstar pays out 24.1% of its earnings in the form of a dividend.

Profitability

This table compares Morningstar and TransUnion’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Morningstar 19.43% 15.55% 8.52%
TransUnion 12.08% 20.32% 6.22%

Volatility & Risk

Morningstar has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, TransUnion has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Insider & Institutional Ownership

38.3% of Morningstar shares are owned by institutional investors. 57.4% of Morningstar shares are owned by company insiders. Comparatively, 2.1% of TransUnion shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Morningstar beats TransUnion on 8 of the 15 factors compared between the two stocks.

Morningstar Company Profile

Morningstar, Inc. is a provider of independent investment research in North America, Europe, Australia, and Asia. The Company focuses to create products that help investors reach their financial goals. It offers a range of data, software, research, and investment management offerings for financial advisors, asset managers, sponsors, and individual investors. It provides data and research insights on a range of investment offerings, including managed investment products, listed companies, capital markets, and real-time global market data. It conducts its business operations outside of the United States through subsidiaries in countries, including Australia, Brazil, Canada, Chile, Denmark, France, Germany, India, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, People’s Republic of China (both Hong Kong and the mainland), Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, the United Arab Emirates, and the United Kingdom.

TransUnion Company Profile

TransUnion is a risk and information solutions provider to businesses and consumers. The Company provides consumer reports, risk scores, analytical services and decision capabilities to businesses. The Company operates through three segments: U.S. Information Services (USIS), International and Consumer Interactive. The USIS segment provides consumer reports, risk scores, analytical services and decisioning capabilities to businesses. The International segment provides services similar to its USIS segment to businesses in select regions outside the United States. The Consumer Interactive segment offers solutions that help consumers manage their personal finances and take precautions against identity theft. Businesses uses its solutions for their process workflows to assess consumer ability to pay for services, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud.

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