FBR & Co (NASDAQ: FBRC) and Investment Technology Group (NYSE:ITG) are both financials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, dividends, earnings and risk.

Insider and Institutional Ownership

72.4% of FBR & Co shares are held by institutional investors. Comparatively, 87.6% of Investment Technology Group shares are held by institutional investors. 13.9% of FBR & Co shares are held by company insiders. Comparatively, 2.4% of Investment Technology Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

FBR & Co has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500. Comparatively, Investment Technology Group has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500.

Dividends

FBR & Co pays an annual dividend of $0.80 per share and has a dividend yield of 4.6%. Investment Technology Group pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. FBR & Co pays out -8.9% of its earnings in the form of a dividend. Investment Technology Group pays out -107.7% 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for FBR & Co and Investment Technology Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FBR & Co 0 1 0 0 2.00
Investment Technology Group 0 1 1 0 2.50

Investment Technology Group has a consensus target price of $20.50, suggesting a potential downside of 13.14%. Given Investment Technology Group’s stronger consensus rating and higher probable upside, analysts clearly believe Investment Technology Group is more favorable than FBR & Co.

Valuation and Earnings

This table compares FBR & Co and Investment Technology Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FBR & Co N/A N/A N/A ($9.00) -1.95
Investment Technology Group $464.03 million 1.68 -$8.61 million ($0.26) -90.77

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

Profitability

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

Net Margins Return on Equity Return on Assets
FBR & Co 3.49% 4.34% 0.49%
Investment Technology Group -1.77% 3.08% 1.42%

Summary

Investment Technology Group beats FBR & Co on 9 of the 13 factors compared between the two stocks.

FBR & Co Company Profile

FBR & Co. is an investment banking and institutional brokerage company. The Company focuses on the equity capital markets. The Company operates through two segments: capital markets, which includes investment banking, institutional brokerage and research, and principal investing. Through its broker-dealer operating subsidiaries, the Company focuses its business on providing: capital raising services, including underwriting and placement of public and private equity, equity-linked and debt securities; financial advisory services, including merger and acquisition (M&A) advisory, restructuring, liability management, recapitalization and strategic alternative analysis; institutional sales and trading services focused on equities, equity-linked securities, listed options, high-yield bonds, senior debt and bank loans, as well as securities lending activities, and differentiated securities research.

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.

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