Virtu Financial (NASDAQ: VIRT) and Interactive Brokers Group (NASDAQ:IBKR) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitabiliy, earnings and institutional ownership.

Volatility & Risk

Virtu Financial has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, Interactive Brokers Group has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Virtu Financial and Interactive Brokers Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtu Financial 2 0 0 0 1.00
Interactive Brokers Group 1 4 0 0 1.80

Virtu Financial currently has a consensus price target of $14.50, indicating a potential downside of 11.59%. Interactive Brokers Group has a consensus price target of $38.60, indicating a potential downside of 0.41%. Given Interactive Brokers Group’s stronger consensus rating and higher probable upside, analysts plainly believe Interactive Brokers Group is more favorable than Virtu Financial.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 5.9%. Interactive Brokers Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Virtu Financial pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Interactive Brokers Group pays out 38.8% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Virtu Financial and Interactive Brokers Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Virtu Financial $567.89 million 1.17 $29.28 million $0.72 22.78
Interactive Brokers Group $1.36 billion 1.94 $70.03 million $1.03 37.63

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

Profitability

This table compares Virtu Financial and Interactive Brokers Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virtu Financial 4.41% 20.72% 2.79%
Interactive Brokers Group 4.97% 1.19% 0.13%

Insider & Institutional Ownership

90.6% of Virtu Financial shares are held by institutional investors. Comparatively, 14.3% of Interactive Brokers Group shares are held by institutional investors. 69.9% of Virtu Financial shares are held by insiders. Comparatively, 3.4% of Interactive Brokers Group shares are held by 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.

Summary

Interactive Brokers Group beats Virtu Financial on 10 of the 15 factors compared between the two stocks.

Virtu Financial Company Profile

Virtu Financial, Inc. is a holding company. The Company is a technology-enabled market maker and liquidity provider to the financial markets across the world. It is engaged in buying or selling a range of securities and other financial instruments and earning small bid/ask spreads across various transactions. It has a single, multi-asset, multi-currency technology platform, through which it provides quotations to buyers and sellers in equities, commodities, currencies, options, fixed income and other securities on exchanges, markets and liquidity pools in various countries around the world. It makes markets in a range of different assets classes, such as Americas Equities; Europe, the Middle East and Africa (EMEA) Equities; Asia Pacific (APAC) Equities; Global Commodities; Global Currencies, and Options, Fixed Income and Other Securities. It makes markets for global banks, brokers and other intermediaries, and indirectly provides services to retail and institutional investors.

Interactive Brokers Group Company Profile

Interactive Brokers Group, Inc. (IBG, Inc.) is a holding company. The Company is an automated global electronic broker and market maker specializing in routing orders, and executing and processing trades in securities, futures, foreign exchange instruments, bonds and mutual funds on over 120 electronic exchanges and market centers around the world and offering custody, prime brokerage, securities and margin lending services to customers. It operates in two segments: electronic brokerage and market making. It conducts its electronic brokerage business through its Interactive Brokers (IB) subsidiaries. It conducts its market making business through its Timber Hill (TH) subsidiaries. In the United States, it conducts its business from Greenwich, Connecticut and Chicago, Illinois. Outside the United States, it conducts business in Canada, England, Switzerland, Liechtenstein, China (Hong Kong and Shanghai), India, Australia and Japan.

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