Greenhill & Co. (NYSE: GHL) and Investment Technology Group (NYSE:ITG) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitabiliy.

Volatility and Risk

Greenhill & Co. has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Investment Technology Group has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Greenhill & Co. and Investment Technology Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Greenhill & Co. 5 1 0 0 1.17
Investment Technology Group 0 1 1 0 2.50

Greenhill & Co. currently has a consensus price target of $21.17, indicating a potential upside of 6.10%. Investment Technology Group has a consensus price target of $18.50, indicating a potential downside of 15.83%. Given Greenhill & Co.’s higher probable upside, equities research analysts clearly believe Greenhill & Co. is more favorable than Investment Technology Group.

Profitability

This table compares Greenhill & Co. and Investment Technology Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Greenhill & Co. 17.09% 20.42% 13.50%
Investment Technology Group -3.89% 1.73% 0.77%

Dividends

Greenhill & Co. pays an annual dividend of $1.80 per share and has a dividend yield of 9.0%. Investment Technology Group pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Greenhill & Co. pays out 102.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Investment Technology Group pays out -50.0% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Greenhill & Co. and Investment Technology Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Greenhill & Co. $322.28 million 1.83 $51.76 million $1.75 11.40
Investment Technology Group $460.56 million 1.58 -$18.56 million ($0.56) -39.25

Greenhill & Co. has higher revenue, but lower earnings than Investment Technology Group. Investment Technology Group is trading at a lower price-to-earnings ratio than Greenhill & Co., indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

96.8% of Greenhill & Co. shares are held by institutional investors. Comparatively, 87.2% of Investment Technology Group shares are held by institutional investors. 8.3% of Greenhill & Co. shares are held by insiders. Comparatively, 2.4% of Investment Technology Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Greenhill & Co. beats Investment Technology Group on 10 of the 15 factors compared between the two stocks.

About Greenhill & Co.

Greenhill & Co., Inc. is an investment bank. The Company provides financial and strategic advice on domestic and cross-border mergers and acquisitions, divestitures, restructurings, financings, capital raising and other transactions to a diverse client base, including corporations, partnerships, institutions and governments globally. The Company also provides advice in connection with defense preparedness, activist response strategies and other mission critical situations. The Company acts for clients located across the world from its offices located in the United States, Australia, Brazil, Canada, Germany, Hong Kong, Japan, Sweden, and the United Kingdom. The Company’s subsidiaries provide advisory services in various jurisdictions. Its operating entities include Greenhill & Co., LLC (G&Co), Greenhill & Co. International LLP (GCI), Greenhill & Co. Europe LLP (GCE), Greenhill & Co. Australia Pty Limited (Greenhill Australia) and Greenhill Cogent, LP (GC LP).

About Investment Technology Group

Investment Technology Group, Inc. (ITG) is a financial technology company that helps brokers and asset managers improve returns for investors around the world. The Company operates through four segments: U.S. Operations, Canadian Operations, European Operations and Asia Pacific Operations. These four segments provide categories of products and services, such as Execution Services, Workflow Technology and Analytics. Execution Services includes self-directed trading using algorithms, smart routing and matching through POSIT in cash equities, futures and options trading and portfolio trading and high-touch trading desks providing execution expertise. Workflow Technology includes trade order and execution management software applications in addition to network connectivity. Analytics includes tools enabling portfolio managers and traders to improve pre-trade, real-time and post-trade execution performance; portfolio construction and optimization decisions, and securities valuation.

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