Critical Review: Booking (BKNG) versus Msci (MSCI)

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Booking (NASDAQ:BKNG) and Msci (NYSE:MSCI) are both large-cap retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Booking and Msci’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Booking $14.53 billion 5.33 $4.00 billion $92.59 19.33
Msci $1.43 billion 13.04 $507.89 million $5.35 41.29

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

Insider and Institutional Ownership

95.4% of Booking shares are owned by institutional investors. Comparatively, 94.1% of Msci shares are owned by institutional investors. 0.2% of Booking shares are owned by company insiders. Comparatively, 3.1% of Msci shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Booking and Msci’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Booking 28.79% 48.32% 18.43%
Msci 39.27% 813.48% 13.78%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Booking and Msci, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Booking 0 14 12 0 2.46
Msci 0 4 5 0 2.56

Booking presently has a consensus price target of $2,076.67, suggesting a potential upside of 16.05%. Msci has a consensus price target of $209.50, suggesting a potential downside of 5.16%. Given Booking’s higher possible upside, analysts plainly believe Booking is more favorable than Msci.

Risk & Volatility

Booking has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Msci has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Dividends

Msci pays an annual dividend of $2.32 per share and has a dividend yield of 1.1%. Booking does not pay a dividend. Msci pays out 43.4% of its earnings in the form of a dividend. Msci has raised its dividend for 4 consecutive years.

Summary

Msci beats Booking on 9 of the 17 factors compared between the two stocks.

About Booking

Booking Holdings Inc, formerly The Priceline Group Inc., is a provider of travel and restaurant online reservation and related services. The Company, through its online travel companies (OTCs), connects consumers wishing to make travel reservations with providers of travel services across the world. It offers consumers an array of accommodation reservations (including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties) through its Booking.com, priceline.com and agoda.com brands. Its other brands include KAYAK, Rentalcars.com and OpenTable, Inc. (OpenTable). As of December 31, 2016, Booking.com offered accommodation reservation services for over 1,115,000 properties in over 220 countries and territories on its various Websites and in over 40 languages, which included over 568,000 vacation rental properties (updated property counts were available on the Booking.com Website).

About Msci

MSCI Inc., together with its subsidiaries, provides investment decision support tools for the clients to manage their investment processes worldwide. The company operates through four segments: Index, Analytics, ESG, and Real Estate. The Index segment primarily provides equity indexes for use in various areas of the investment process, including index-linked product creation and performance benchmarking, as well as portfolio construction and rebalancing, and asset allocation. The Analytics segment offers risk management, performance attribution, and portfolio management content, applications, and services that provide clients with an integrated view of risk and return, and an analysis of market, credit, liquidity, and counterparty risk across various asset classes, spanning short, medium, and long-term time horizons; and various managed services for clients to address the needs of various specialized areas of the investment community by providing a reporting service and performance reporting tools to institutional consultants and investors in hedge funds. The ESG segment provides products and services that help institutional investors understand how environmental, social, and governance (ESG) factors impact the long-term risk of their investments; and data and ratings products for use in the construction of equity and fixed income indexes to help institutional investors benchmark ESG investment performance and issue index-based investment products, as well as manage, measure, and report on ESG mandates. The Real Estate segment offers real estate performance analysis for funds, investors, managers, and lenders. This segment provides products and services that include research, reporting, and benchmarking; and business intelligence to real estate owners, managers, developers, and brokers. MSCI Inc. was founded in 1998 and is headquartered in New York, New York.

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