Financial Analysis: Hennessy Advisors (HNNA) and Victory Capital (VCTR)

Hennessy Advisors (NASDAQ:HNNA) and Victory Capital (NASDAQ:VCTR) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Analyst Ratings

This is a summary of recent ratings and target prices for Hennessy Advisors and Victory Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hennessy Advisors 0 0 0 0 N/A
Victory Capital 0 2 7 0 2.78

Victory Capital has a consensus price target of $13.81, indicating a potential upside of 29.69%. Given Victory Capital’s higher possible upside, analysts plainly believe Victory Capital is more favorable than Hennessy Advisors.

Dividends

Hennessy Advisors pays an annual dividend of $0.44 per share and has a dividend yield of 4.1%. Victory Capital does not pay a dividend. Hennessy Advisors has raised its dividend for 4 consecutive years.

Institutional and Insider Ownership

17.6% of Hennessy Advisors shares are held by institutional investors. Comparatively, 15.8% of Victory Capital shares are held by institutional investors. 40.7% of Hennessy Advisors 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 Hennessy Advisors and Victory Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hennessy Advisors 37.76% 25.31% 16.11%
Victory Capital 14.42% 27.34% 12.97%

Valuation & Earnings

This table compares Hennessy Advisors and Victory Capital’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hennessy Advisors $54.59 million 1.54 $20.61 million N/A N/A
Victory Capital $409.63 million 1.76 $25.82 million $1.25 8.52

Victory Capital has higher revenue and earnings than Hennessy Advisors.

Summary

Victory Capital beats Hennessy Advisors on 7 of the 13 factors compared between the two stocks.

Hennessy Advisors Company Profile

Hennessy Advisors, Inc. is publicly owned investment manager. It provides its services to Hennessy Funds and investment companies. The firm launches and manages equity, fixed income, and balanced mutual funds. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth stocks of companies. It conducts in-house research to make its investments. Hennessy Advisors, Inc. was founded in 1989 and is based in Novato, California with additional offices in Boston, Massachusetts and Chapel Hill, North Carolina.

Victory Capital Company Profile

Victory Capital Holdings, Inc., together with its subsidiaries, operates as an independent investment management company in the United States. It offers investment advisory, fund administration, and distribution services through broker-dealers, retirement platforms, and registered investment advisor networks. As of September 30, 2017, its franchises and solutions platform managed a set of 70 investment strategies for a range of institutional and retail clients. The company was founded in 2013 and is based in Brooklyn, Ohio.

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