Virtu Financial (NASDAQ: VIRT) and Yintech Investment Holdings Limited (NASDAQ:YIN) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 5.7%. Yintech Investment Holdings Limited pays an annual dividend of $0.80 per share and has a dividend yield of 6.7%. Virtu Financial pays out 188.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Yintech Investment Holdings Limited pays out 37.2% of its earnings in the form of a dividend. Yintech Investment Holdings Limited is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Virtu Financial and Yintech Investment Holdings Limited’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Virtu Financial $531.65 million 2.74 $44.41 million $0.51 32.75
Yintech Investment Holdings Limited $506.89 million 1.65 $150.76 million $2.15 5.56

Yintech Investment Holdings Limited has higher revenue, but lower earnings than Virtu Financial. Yintech Investment Holdings Limited is trading at a lower price-to-earnings ratio than Virtu Financial, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

21.9% of Virtu Financial shares are held by institutional investors. Comparatively, 1.6% of Yintech Investment Holdings Limited shares are held by institutional investors. 69.9% of Virtu Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Virtu Financial and Yintech Investment Holdings Limited, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtu Financial 2 3 0 0 1.60
Yintech Investment Holdings Limited 0 0 1 0 3.00

Virtu Financial presently has a consensus price target of $15.60, indicating a potential downside of 6.59%. Yintech Investment Holdings Limited has a consensus price target of $15.00, indicating a potential upside of 25.42%. Given Yintech Investment Holdings Limited’s stronger consensus rating and higher probable upside, analysts clearly believe Yintech Investment Holdings Limited is more favorable than Virtu Financial.

Volatility & Risk

Virtu Financial has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Yintech Investment Holdings Limited has a beta of -0.74, meaning that its share price is 174% less volatile than the S&P 500.

Profitability

This table compares Virtu Financial and Yintech Investment Holdings Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virtu Financial 3.42% 16.54% 2.24%
Yintech Investment Holdings Limited 30.09% 33.52% 28.50%

Summary

Yintech Investment Holdings Limited beats Virtu Financial on 10 of the 16 factors compared between the two stocks.

About Virtu Financial

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.

About Yintech Investment Holdings Limited

Yintech Investment Holdings Limited is an online provider of spot commodity trading services in China. The Company facilitates the trading by individual customers of silver, gold, and other precious metals and commodities on the Shanghai Gold Exchange, the Tianjin Precious Metals Exchange and the Guangdong Precious Metals Exchange. The Company provides its customers with various services, such as account opening, investor education, market information, research, live discussion boards and real-time customer support. On the Tianjin Precious Metals Exchange and the Guangdong Precious Metals Exchange, the Company serves as counterparty to its customers’ trades. On the Shanghai Gold Exchange, the Company serves as an agent and does not hold principal positions. The Company’s services include investor education, market information provision and research. Its research services include research reports, online lectures, live market commentaries and quantitative analysis.

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