Critical Analysis: ONEX (OTCMKTS:ONEXF) versus BlackRock (NYSE:BLK)

BlackRock (NYSE:BLK) and ONEX (OTCMKTS:ONEXF) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Dividends

BlackRock pays an annual dividend of $20.84 per share and has a dividend yield of 2.0%. ONEX pays an annual dividend of $0.29 per share and has a dividend yield of 0.4%. BlackRock pays out 53.6% of its earnings in the form of a dividend. ONEX pays out 4.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. BlackRock has increased its dividend for 16 consecutive years. BlackRock is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares BlackRock and ONEX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BlackRock	26.64%	14.80%	5.04%
ONEX	56.15%	5.09%	3.19%

Earnings and Valuation

This table compares BlackRock and ONEX”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BlackRock	$20.41 billion	8.05	$6.37 billion	$38.89	27.24
ONEX	$649.00 million	8.52	$303.00 million	$6.21	12.98

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

Risk and Volatility

BlackRock has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500. Comparatively, ONEX has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for BlackRock and ONEX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BlackRock	0	3	17	0	2.85
ONEX	0	1	2	0	2.67

BlackRock presently has a consensus target price of $1,316.18, indicating a potential upside of 24.24%. Given BlackRock’s stronger consensus rating and higher probable upside, research analysts clearly believe BlackRock is more favorable than ONEX.

Insider and Institutional Ownership

80.7% of BlackRock shares are owned by institutional investors. Comparatively, 0.7% of ONEX shares are owned by institutional investors. 2.0% of BlackRock shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

BlackRock beats ONEX on 14 of the 17 factors compared between the two stocks.

About BlackRock

BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.

About ONEX

Onex Corporation is a private equity firm specializing in acquisitions and platform acquisitions. The firm makes investments in buyouts, large- middle market, large-cap, mid-cap, and small-cap market and distressed companies. It also invests in recapitalization, growth capital, corporate carve-outs of subsidiaries and mission-critical supply divisions from multinational corporations, operational restructurings of undervalued businesses, and builds up. The firm seeks to invest in technology, electronics manufacturing services, industrial, aerospace, healthcare, retail, restaurants, industrials products, customer care services, metal services, building products, entertainment, gaming, cabinetry products, commercial vehicles, commercial and investment banking, financial services, commercial and multi-unit residential real estate. It invests in global businesses headquartered in North America, including United States and Canada, or Europe. The firm seeks to invest between $125 million and $1 billion in companies that have minimum revenues of $300 million. It does not consider size if the company is in an industry in which the firm already has presence. The firm seeks to make direct as well as co-investments through managed private equity, real estate and credit funds. It seeks to acquire a control position in its portfolio companies. Onex Corporation was founded in 1984 and is based in Toronto, Canada with additional offices in New York, New York; Englewood Cliffs, New Jersey; Boston, Massachusetts and London, United Kingdom.