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

Profitability

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

Net Margins Return on Equity Return on Assets
MarketAxess Holdings 37.46% 30.38% 27.43%
Yintech Investment Holdings Limited 30.09% 33.52% 28.50%

Insider and Institutional Ownership

90.2% of MarketAxess Holdings shares are owned by institutional investors. Comparatively, 1.6% of Yintech Investment Holdings Limited shares are owned by institutional investors. 4.0% of MarketAxess Holdings shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

MarketAxess Holdings has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Yintech Investment Holdings Limited has a beta of -0.78, indicating that its share price is 178% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for MarketAxess Holdings and Yintech Investment Holdings Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MarketAxess Holdings 0 2 2 1 2.80
Yintech Investment Holdings Limited 0 0 1 0 3.00

MarketAxess Holdings presently has a consensus price target of $192.40, indicating a potential upside of 1.22%. Yintech Investment Holdings Limited has a consensus price target of $15.00, indicating a potential upside of 16.55%. Given Yintech Investment Holdings Limited’s stronger consensus rating and higher probable upside, analysts clearly believe Yintech Investment Holdings Limited is more favorable than MarketAxess Holdings.

Dividends

MarketAxess Holdings pays an annual dividend of $1.32 per share and has a dividend yield of 0.7%. Yintech Investment Holdings Limited pays an annual dividend of $0.80 per share and has a dividend yield of 6.2%. MarketAxess Holdings pays out 34.6% of its earnings in the form of a dividend. Yintech Investment Holdings Limited pays out 37.2% 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.

Valuation & Earnings

This table compares MarketAxess Holdings and Yintech Investment Holdings Limited’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MarketAxess Holdings $385.91 million 18.49 $219.16 million $3.81 49.89
Yintech Investment Holdings Limited $506.89 million 1.78 $150.76 million $2.15 5.99

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

Summary

MarketAxess Holdings beats Yintech Investment Holdings Limited on 11 of the 17 factors compared between the two stocks.

MarketAxess Holdings Company Profile

MarketAxess Holdings Inc. operates an electronic trading platform that enables fixed-income market participants to trade corporate bonds and other types of fixed-income instruments using its trading technology. Institutional investor and broker-dealer firms are users of trading platform, accessing global liquidity in the United States corporate bonds, emerging markets and high-yield bonds, European bonds, the United States agency bonds, municipal bonds, credit default swaps and other fixed-income securities. Through Open Trading protocols, it executes trades in certain bonds between and among institutional investor and broker-dealer clients in a trading environment on a matched principal basis. It offers trading-related products and services, including market data to assist clients with trading decisions; connectivity solutions that facilitate straight-through processing; technology services to optimize trading environments, and execution services for exchange-traded fund managers.

Yintech Investment Holdings Limited Company Profile

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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