Head to Head Analysis: Virtu Financial (VIRT) vs. Intercontinental Exchange (ICE)

Virtu Financial (NASDAQ: VIRT) and Intercontinental Exchange (NYSE:ICE) are both mid-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Profitability

This table compares Virtu Financial and Intercontinental Exchange’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Virtu Financial 0.13% 11.56% 1.60%
Intercontinental Exchange 27.91% 11.01% 2.18%

Volatility and Risk

Virtu Financial has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Intercontinental Exchange has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Virtu Financial and Intercontinental Exchange, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Virtu Financial 1 4 1 0 2.00
Intercontinental Exchange 0 2 6 0 2.75

Virtu Financial currently has a consensus price target of $16.67, indicating a potential downside of 1.67%. Intercontinental Exchange has a consensus price target of $72.38, indicating a potential upside of 0.76%. Given Intercontinental Exchange’s stronger consensus rating and higher probable upside, analysts plainly believe Intercontinental Exchange is more favorable than Virtu Financial.

Insider & Institutional Ownership

26.6% of Virtu Financial shares are owned by institutional investors. Comparatively, 90.8% of Intercontinental Exchange shares are owned by institutional investors. 69.9% of Virtu Financial shares are owned by insiders. Comparatively, 1.5% of Intercontinental Exchange shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Virtu Financial pays an annual dividend of $0.96 per share and has a dividend yield of 5.7%. Intercontinental Exchange pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. Virtu Financial pays out 600.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Intercontinental Exchange pays out 29.1% of its earnings in the form of a dividend. Virtu Financial has raised its dividend for 3 consecutive years. Virtu Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Virtu Financial and Intercontinental Exchange’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Virtu Financial $702.27 million 4.52 $32.98 million $0.16 105.94
Intercontinental Exchange $5.96 billion 7.05 $1.42 billion $2.75 26.12

Intercontinental Exchange has higher revenue and earnings than Virtu Financial. Intercontinental Exchange is trading at a lower price-to-earnings ratio than Virtu Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Intercontinental Exchange beats Virtu Financial on 12 of the 17 factors compared between the two stocks.

Virtu Financial Company Profile

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.

Intercontinental Exchange Company Profile

Intercontinental Exchange Inc, formerly IntercontinentalExchange Group, Inc., is a network of regulated exchanges and clearing houses for financial and commodity markets. The Company delivers transparent and accessible data, technology and risk management services to markets around the world through its portfolio of exchanges, including the New York Stock Exchange, ICE Futures, Liffe and Euronext. In February 2014, the Company completed the acquisition of Singapore Mercantile Exchange. In July 2014, Intercontinental Exchange Inc sold its Wombat Financial Software, a unit of NYSE Technologies. Effective September 10, 2014, Intercontinental Exchange Inc acquired an undisclosed majority interest in Holland Clearing House NV.

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