Head to Head Analysis: Diamond Hill Investment Group (DHIL) & StoneCastle Financial (BANX)

Diamond Hill Investment Group (NASDAQ:DHIL) and StoneCastle Financial (NASDAQ:BANX) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Dividends

StoneCastle Financial pays an annual dividend of $1.52 per share and has a dividend yield of 7.0%. Diamond Hill Investment Group does not pay a dividend. StoneCastle Financial pays out 95.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares Diamond Hill Investment Group and StoneCastle Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diamond Hill Investment Group $145.20 million 4.11 $49.98 million N/A N/A
StoneCastle Financial $17.37 million 8.16 $12.03 million $1.59 13.62

Diamond Hill Investment Group has higher revenue and earnings than StoneCastle Financial.

Profitability

This table compares Diamond Hill Investment Group and StoneCastle Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diamond Hill Investment Group 35.05% 26.57% 18.15%
StoneCastle Financial 78.09% N/A N/A

Volatility & Risk

Diamond Hill Investment Group has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, StoneCastle Financial has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500.

Institutional and Insider Ownership

59.8% of Diamond Hill Investment Group shares are owned by institutional investors. Comparatively, 22.9% of StoneCastle Financial shares are owned by institutional investors. 6.4% of Diamond Hill Investment Group shares are owned by insiders. Comparatively, 8.1% of StoneCastle Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Diamond Hill Investment Group and StoneCastle Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diamond Hill Investment Group 0 0 0 0 N/A
StoneCastle Financial 0 0 4 0 3.00

StoneCastle Financial has a consensus target price of $23.75, indicating a potential upside of 9.70%. Given StoneCastle Financial’s higher possible upside, analysts clearly believe StoneCastle Financial is more favorable than Diamond Hill Investment Group.

Diamond Hill Investment Group Company Profile

Diamond Hill Investment Group, Inc., together with its subsidiaries, provides investment advisory and fund administration services in the United States. It sponsors, distributes, and offers investment advisory and related services to a range of clients, such as corporations, mutual funds, retirement plans, public pension funds, endowments, foundations, financial institutions, and high net worth individuals. The company also provides fund administration services, including portfolio and regulatory compliance, treasury and financial oversight, and general business management and governance of the mutual fund complex, as well as oversight of back-office service providers, such as the custodian, fund accountant, and transfer agent. It offers investment advisory services to third-party financial intermediaries comprising independent registered investment advisors, brokers, financial planners, and wealth advisers; and fund administration services primarily to mutual funds, institutional accounts, and private investment funds. The company was founded in 1990 and is based in Columbus, Ohio.

StoneCastle Financial Company Profile

StoneCastle Financial Corp. is a closed ended balanced mutual fund launched and managed by StoneCastle Asset Management LLC. It invests in public equity markets of the United States. The fund invests in stocks of companies operating across the banking sector. It invests in dividend paying growth and value stocks of companies. For its fixed income portion, the fund invests in subordinated debt securities which are rated BBB- or better by Kroll Ratings. The fund employs fundamental analysis with bottom-up security picking approach by focusing on factors such as review of historical and prospective financial information, interviews with management and key employees of the prospective bank, financial models and projections, changes in interest rates, changes in unemployment rates, changes in home prices, changes in economic activity to create its portfolio. It employs proprietary research to create its portfolio. StoneCastle Financial Corp. was formed on February 7, 2013 and is domiciled in the United States.

Receive News & Ratings for Diamond Hill Investment Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Diamond Hill Investment Group and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply