Analyzing DigitalBridge Group (NYSE:DBRG) and StepStone Group (NASDAQ:STEP)

StepStone Group (NASDAQ:STEP) and DigitalBridge Group (NYSE:DBRG) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Insider and Institutional Ownership

55.5% of StepStone Group shares are owned by institutional investors. Comparatively, 92.7% of DigitalBridge Group shares are owned by institutional investors. 18.4% of StepStone Group shares are owned by company insiders. Comparatively, 3.4% of DigitalBridge Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

StepStone Group pays an annual dividend of $0.96 per share and has a dividend yield of 1.4%. DigitalBridge Group pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. StepStone Group pays out 126.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DigitalBridge Group pays out 5.5% of its earnings in the form of a dividend.

Risk and Volatility

StepStone Group has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, DigitalBridge Group has a beta of 1.94, suggesting that its stock price is 94% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for StepStone Group and DigitalBridge Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
StepStone Group	0	4	3	0	2.43
DigitalBridge Group	0	1	6	1	3.00

StepStone Group currently has a consensus target price of $61.71, suggesting a potential downside of 9.28%. DigitalBridge Group has a consensus target price of $18.13, suggesting a potential upside of 46.52%. Given DigitalBridge Group’s stronger consensus rating and higher probable upside, analysts clearly believe DigitalBridge Group is more favorable than StepStone Group.

Profitability

This table compares StepStone Group and DigitalBridge Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
StepStone Group	N/A	10.02%	4.55%
DigitalBridge Group	21.42%	3.58%	1.72%

Earnings & Valuation

This table compares StepStone Group and DigitalBridge Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
StepStone Group	$711.63 million	10.58	$58.09 million	$0.76	89.51
DigitalBridge Group	$1.50 billion	1.43	$185.28 million	$0.73	16.95

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

Summary

DigitalBridge Group beats StepStone Group on 10 of the 17 factors compared between the two stocks.

About StepStone Group

StepStone Group Inc. is a private equity and venture capital firm specializing in direct, fund of funds, secondary direct, and secondary indirect investments. For direct investment, it seeks to invest in private debt, venture debt, incubation, mezzanine, distressed/vulture, seed/startup, early venture, mid venture, late venture, emerging growth, later stage, turnaround, growth capital, industry consolidation, recapitalization, buyout investments in mature and middle market companies. It prefers to invest in natural resources, technology, healthcare, services, materials, manufacturing, consumer durables, apparel, hotels, restaurants and leisure, media, retailing, power, utilities consumer staples, financials, telecommunication services, clean energy/renewables, transport, social, natural capital, infrastructure, corporate, real estate, credit and real asset. The firm invests globally with a focus on United States, North America, Europe, Asia, Latin America, Middle East, Africa, Brazil, Mexico, Argentina, Colombia, New Zealand, China, India, Korea, Japan, Taiwan, and Australia region. The firm invests between 5% and 40% in emerging markets. For fund of fund investment, it seeks to invest in private equity funds, venture capital funds, Special situation funds, Real estate funds, Infrastructure funds, mezzanine funds, and turnaround/distressed funds. It considers investments in both domestic and international funds. It also seeks to make co-investments and follow-on investments and considers partial interests in funds. StepStone Group Inc. was founded in 2007 and is based in New York, New York with additional offices across North America, South America, Europe, Australia and Asia.

About DigitalBridge Group

DigitalBridge is an infrastructure investment firm specializing in digital infrastructure assets. They provide services to institutional investors. They primarily invest in data centers, cell towers, fiber networks, small cells, and edge infrastructure. DigitalBridge Group, Inc. was founded in 1991 and is headquartered in Boca Raton, Florida with additional offices in Los Angles, California, and New York New York.