Morgan Stanley (MS) vs. Capital Financial (CPFH) Critical Review

Morgan Stanley (NYSE:MS) and Capital Financial (OTCMKTS:CPFH) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Profitability

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

Net Margins Return on Equity Return on Assets
Morgan Stanley 15.93% 12.51% 1.03%
Capital Financial 0.74% 20.10% 2.02%

Risk & Volatility

Morgan Stanley has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Capital Financial has a beta of -1.72, indicating that its share price is 272% less volatile than the S&P 500.

Valuation and Earnings

This table compares Morgan Stanley and Capital Financial’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Morgan Stanley $43.64 billion 1.68 $6.11 billion $3.60 11.83
Capital Financial $15.57 million N/A -$130,000.00 N/A N/A

Morgan Stanley has higher revenue and earnings than Capital Financial.

Dividends

Morgan Stanley pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. Capital Financial pays an annual dividend of $50.00 per share and has a dividend yield of 3.9%. Morgan Stanley pays out 33.3% of its earnings in the form of a dividend. Morgan Stanley has increased its dividend for 5 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Morgan Stanley and Capital Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Morgan Stanley 0 7 9 0 2.56
Capital Financial 0 0 0 0 N/A

Morgan Stanley currently has a consensus target price of $56.40, suggesting a potential upside of 32.39%. Given Morgan Stanley’s higher probable upside, equities research analysts plainly believe Morgan Stanley is more favorable than Capital Financial.

Insider and Institutional Ownership

85.1% of Morgan Stanley shares are held by institutional investors. 0.2% of Morgan Stanley shares are held by insiders. Comparatively, 54.0% of Capital Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Morgan Stanley beats Capital Financial on 8 of the 13 factors compared between the two stocks.

Morgan Stanley Company Profile

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. The company operates 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 sales and trading services, such as sales, financing, prime brokerage, and market-making services in equity securities and fixed income products consisting of foreign exchange and commodities; corporate loans, commercial and residential mortgage lending, and asset-backed lending; financing for equities and commodities customers, and municipalities; and investment and research services. The Wealth Management segment offers various financial services and solutions covering brokerage and investment advisory services, financial and wealth planning services, annuity and insurance products, credit and other lending products, and banking and retirement plan services to individual investors and small to medium-sized businesses/institutions. The Investment Management segment provides various investment strategies and products comprising equity, fixed income, liquidity, and alternative/other products to defined benefit/defined contribution plans, foundations, endowments, government entities, sovereign wealth funds, insurance companies, and third-party fund sponsors and corporations through a network of institutional and intermediary channels. Morgan Stanley was founded in 1924 and is headquartered in New York, New York.

Capital Financial Company Profile

Capital Financial Holdings, Inc., a full-service brokerage firm, provides investment products and services to independent investment representatives, financial planners, and investment advisors in the United States. It offers mutual funds, insurance products, and various other securities, as well as investment advisory services. The company was formerly known as Integrity Mutual Funds, Inc. and changed its name to Capital Financial Holdings, Inc. in May 2009. Capital Financial Holdings, Inc. was founded in 1987 and is headquartered in Minot, North Dakota.

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