Investment Technology Group (NYSE: ITG) and PJT Partners (NYSE:PJT) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.

Risk and Volatility

Investment Technology Group has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, PJT Partners has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.

Profitability

This table compares Investment Technology Group and PJT Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Investment Technology Group -1.77% 3.08% 1.42%
PJT Partners -0.27% -115.47% 11.68%

Valuation & Earnings

This table compares Investment Technology Group and PJT Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Investment Technology Group $464.03 million 1.44 -$8.61 million ($0.26) -77.38
PJT Partners $524.92 million 1.27 -$1.85 million ($0.10) -359.40

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

Analyst Recommendations

This is a breakdown of recent ratings for Investment Technology Group and PJT Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Investment Technology Group 0 0 1 0 3.00
PJT Partners 0 0 1 0 3.00

Investment Technology Group presently has a consensus target price of $20.00, indicating a potential downside of 0.60%. PJT Partners has a consensus target price of $45.00, indicating a potential upside of 25.21%. Given PJT Partners’ higher possible upside, analysts plainly believe PJT Partners is more favorable than Investment Technology Group.

Insider and Institutional Ownership

87.6% of Investment Technology Group shares are owned by institutional investors. Comparatively, 59.2% of PJT Partners shares are owned by institutional investors. 2.4% of Investment Technology Group shares are owned by company insiders. Comparatively, 3.3% of PJT Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Investment Technology Group pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. PJT Partners pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Investment Technology Group pays out -107.7% of its earnings in the form of a dividend. PJT Partners pays out -200.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

PJT Partners beats Investment Technology Group on 8 of the 14 factors compared between the two stocks.

Investment Technology Group Company Profile

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.

PJT Partners Company Profile

PJT Partners Inc. is an advisory-focused investment bank. The Company offers an array of strategic advisory, restructuring and special situations and private fund advisory and placement services to corporations, financial sponsors, institutional investors and governments. It provides, through Park Hill Group, private fund advisory and placement services for alternative investment managers, including private equity funds, real estate funds and hedge funds. Its advisory business offers a range of financial advisory and transaction execution capability, including mergers and acquisitions, joint ventures, minority investments, asset swaps, divestitures, takeover defenses, corporate finance advisory, private placements and distressed sales. Its Restructuring and Special Situations Group’s services include advising companies, creditors and financial sponsors on recapitalizations, reorganizations, exchange offers, debt repurchases, capital raises, and distressed mergers and acquisitions.

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