The Charles Schwab Corporation (NYSE: SCHW) and GAIN Capital Holdings (NYSE:GCAP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitabiliy, institutional ownership and earnings.

Volatility & Risk

The Charles Schwab Corporation has a beta of 1.64, suggesting that its stock price is 64% more volatile than the S&P 500. Comparatively, GAIN Capital Holdings has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500.

Profitability

This table compares The Charles Schwab Corporation and GAIN Capital Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Charles Schwab Corporation 26.73% 15.69% 0.98%
GAIN Capital Holdings 2.25% 3.27% 0.63%

Dividends

The Charles Schwab Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. GAIN Capital Holdings pays an annual dividend of $0.24 per share and has a dividend yield of 3.6%. The Charles Schwab Corporation pays out 21.5% of its earnings in the form of a dividend. GAIN Capital Holdings pays out 218.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares The Charles Schwab Corporation and GAIN Capital Holdings’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Charles Schwab Corporation $8.08 billion 7.08 $1.99 billion $1.49 28.71
GAIN Capital Holdings $347.04 million 0.92 $5.24 million $0.11 60.82

The Charles Schwab Corporation has higher revenue and earnings than GAIN Capital Holdings. The Charles Schwab Corporation is trading at a lower price-to-earnings ratio than GAIN Capital Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for The Charles Schwab Corporation and GAIN Capital Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Charles Schwab Corporation 0 6 10 0 2.63
GAIN Capital Holdings 0 1 1 0 2.50

The Charles Schwab Corporation currently has a consensus price target of $44.27, indicating a potential upside of 3.48%. GAIN Capital Holdings has a consensus price target of $8.50, indicating a potential upside of 27.06%. Given GAIN Capital Holdings’ higher possible upside, analysts clearly believe GAIN Capital Holdings is more favorable than The Charles Schwab Corporation.

Insider and Institutional Ownership

79.1% of The Charles Schwab Corporation shares are owned by institutional investors. Comparatively, 51.2% of GAIN Capital Holdings shares are owned by institutional investors. 12.0% of The Charles Schwab Corporation shares are owned by company insiders. Comparatively, 5.0% of GAIN Capital Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

The Charles Schwab Corporation beats GAIN Capital Holdings on 13 of the 16 factors compared between the two stocks.

The Charles Schwab Corporation Company Profile

The Charles Schwab Corporation (CSC) is a savings and loan holding company. The Company, through its subsidiaries, engages in wealth management, securities brokerage, banking, money management and financial advisory services. The Company provides financial services to individuals and institutional clients through two segments: Investor Services and Advisor Services. The Investor Services segment provides retail brokerage and banking services, retirement plan services and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services. The Company offers a range of products to address individuals’ varying investment and financial needs. Its product offerings include brokerage, mutual funds, ETFs, advice solutions, banking and trust. Brokerage provides a range of brokerage accounts with cash management capabilities. Mutual funds offer third-party mutual funds through the Mutual Fund Marketplace.

GAIN Capital Holdings Company Profile

GAIN Capital Holdings, Inc. (GAIN) is a provider of trading services and solutions, specializing in over-the-counter (OTC) and exchange-traded markets. The Company’s segments include Retail segment, Institutional segment and Futures segment. Through its retail segment, the Company provides its retail customers across the world with access to a range of global financial markets, including spot forex, precious metals, spread bets and contracts for difference (CFDs) on commodities, indices, individual equities and interest rate products, as well OTC options on forex. Its institutional segment provides agency execution services and offers electronic access to spot and forward foreign exchange and precious metals markets through Electronic Communications Network (ECN), through its GTX platform. Its futures segment offers execution and risk management services for exchange-traded futures and futures options on the United States and European exchanges.

Receive News & Ratings for The Charles Schwab Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for The Charles Schwab Corporation and related companies with MarketBeat.com's FREE daily email newsletter.