Carlyle Group (NASDAQ:CG) vs. Morgan Stanley (NYSE:MS) Financial Survey

Morgan Stanley (NYSE:MS) and Carlyle Group (NASDAQ:CG) are both large-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Dividends

Morgan Stanley pays an annual dividend of $4.60 per share and has a dividend yield of 2.4%. Carlyle Group pays an annual dividend of $1.40 per share and has a dividend yield of 3.4%. Morgan Stanley pays out 36.5% of its earnings in the form of a dividend. Carlyle Group pays out 148.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Morgan Stanley has increased its dividend for 12 consecutive years and Carlyle Group has increased its dividend for 4 consecutive years.

Insider & Institutional Ownership

84.2% of Morgan Stanley shares are held by institutional investors. Comparatively, 55.9% of Carlyle Group shares are held by institutional investors. 0.2% of Morgan Stanley shares are held by insiders. Comparatively, 25.4% of Carlyle Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Morgan Stanley has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Carlyle Group has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Morgan Stanley	15.63%	19.26%	1.28%
Carlyle Group	9.83%	23.63%	5.79%

Earnings and Valuation

This table compares Morgan Stanley and Carlyle Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Morgan Stanley	$74.84 billion	3.98	$16.86 billion	$12.60	15.13
Carlyle Group	$4.78 billion	3.04	$808.70 million	$0.94	43.74

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

Analyst Ratings

This is a breakdown of recent recommendations for Morgan Stanley and Carlyle Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Morgan Stanley	1	13	10	2	2.50
Carlyle Group	1	9	7	0	2.35

Morgan Stanley currently has a consensus price target of $214.81, suggesting a potential upside of 12.71%. Carlyle Group has a consensus price target of $50.21, suggesting a potential upside of 22.12%. Given Carlyle Group’s higher probable upside, analysts clearly believe Carlyle Group is more favorable than Morgan Stanley.

Summary

Morgan Stanley beats Carlyle Group on 11 of the 18 factors compared between the two stocks.

About Morgan Stanley

Morgan Stanley is a global financial services company that provides investment banking, securities, wealth management and investment management services to corporations, governments, institutions and individuals. Its Institutional Securities business offers services such as financial advisory, capital raising, sales and trading, and research. The company also provides financial planning, brokerage and banking services through its Wealth Management business, while its Investment Management business offers investment strategies and portfolio management to a range of clients.

About Carlyle Group

The Carlyle Group Inc. is a global alternative asset manager that invests on behalf of institutional and individual clients. Its business includes private equity, credit and investment solutions, including portfolios of private equity funds and related investments. Founded in Washington, D.C., in 1987, Carlyle has grown into an international firm with investment activities and offices across North America, Europe and Asia, among other regions. Its strategies span a range of industries and markets, and it works with businesses at different stages of development.