Morgan Stanley (NYSE:MS) and Cigna (NYSE:CI) are both large-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, institutional ownership, risk, valuation, profitability and analyst recommendations.
Analyst Recommendations
This is a summary of current recommendations and price targets for Morgan Stanley and Cigna, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Morgan Stanley | 0 | 7 | 16 | 0 | 2.70 |
Cigna | 0 | 2 | 11 | 1 | 2.93 |
Morgan Stanley presently has a consensus price target of $65.8571, indicating a potential downside of 18.56%. Cigna has a consensus price target of $248.40, indicating a potential upside of 7.71%. Given Cigna's stronger consensus rating and higher probable upside, analysts plainly believe Cigna is more favorable than Morgan Stanley.
Dividends
Morgan Stanley pays an annual dividend of $1.40 per share and has a dividend yield of 1.7%. Cigna pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Morgan Stanley pays out 28.1% of its earnings in the form of a dividend. Cigna pays out 0.2% 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. Morgan Stanley has raised its dividend for 1 consecutive years and Cigna has raised its dividend for 1 consecutive years.
Insider & Institutional Ownership
76.8% of Morgan Stanley shares are held by institutional investors. Comparatively, 87.1% of Cigna shares are held by institutional investors. 0.3% of Morgan Stanley shares are held by insiders. Comparatively, 0.9% of Cigna shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Morgan Stanley and Cigna's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Morgan Stanley | 19.16% | 12.33% | 1.02% |
Cigna | 3.38% | 15.39% | 4.54% |
Earnings and Valuation
This table compares Morgan Stanley and Cigna's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Morgan Stanley | $53.82 billion | 2.72 | $9.04 billion | $4.98 | 16.24 |
Cigna | $153.57 billion | 0.53 | $5.10 billion | $17.05 | 13.53 |
Morgan Stanley has higher earnings, but lower revenue than Cigna. Cigna is trading at a lower price-to-earnings ratio than Morgan Stanley, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Morgan Stanley has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500. Comparatively, Cigna has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.
Summary
Cigna beats Morgan Stanley on 11 of the 17 factors compared between the two stocks.